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Can I still release equity in my home during the coronavirus pandemic?

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With people facing a change in their financial circumstances due to the coronavirus outbreak, you may be wondering whether you can source an injection of funds by releasing equity in your home, either for you or to support your loved ones.  Kiri Saunders-Brown, Equity Release specialist, explains here how this is still possible despite the current restrictions from Government and how we are available to assist you during this time.

Are you still able to carry out home visits or surveys?

Over recent years the landscape of equity release has changed dramatically to overcome the negative association.  As well as more protections to avoid falling into negative equity, more stringent security checks have been put in place to combat fraud, one of which being the requirement to have a Solicitor visit you in your home to discuss the legalities involved.

“Obviously with the current restrictions in place, this is now not a possibility,” explains Kiri.  “The Equity Release Council, of which we are a member, has therefore temporarily relaxed their rules regarding face to face visits, and we are now instead offering video conferencing interviews, and making other arrangements for ID checks and witnessing to adhere to the guidance relating to social distancing.”

The other part of the process that will see an impact is the requirement for a valuation survey.  This normally comes early in the process with a surveyor ascertaining the current value of your property and whether any works are needed.  When looking for equity release providers, you should be asking them how they are currently overcoming this and whether they can offer desktop valuation surveys opposed to physical surveys. 

Why should I consider releasing equity?

Equity release was growing in popularity prior to the coronavirus outbreak due to the opportunity it affords those who are looking for extra funds but do not wish to move out of their home.  Ordinarily, people tend to release equity if they are looking to help a loved one onto the property ladder, if they wish to live more comfortably during their retirement, make home renovations or go on a special holiday.  In our current climate however, you may be considering releasing equity in your home if the coronavirus outbreak will have a detrimental effect on your current financial situation, or if you are looking to support a friend or family member through their own difficulties.

There are two schemes available to you if you are considering releasing equity, and the benefits of either one will depend on your own situation, and we can discuss the best option for you.  The two different types of package are:

  • Home reversion plan – a part of your home would be sold to a private company and you would receive a regular income, a cash lump sum or both.  You would remain in your home until the property is sold, at which time the private company would receive the proceeds of the sale.
  • Lifetime mortgage – this is the more popular option of the two as you would retain full ownership of your property and borrow against the value of your home.  Again, you can receive either a lump sum or an income or both with the loan being repaid either when you pass away or move into alternative accommodation and the property is sold. 

Under either scheme, we can advise you as to the best option for you regarding interest rates, repayment plans and the impact equity release has other areas of your life, such as on Inheritance Tax. 

“Research conducted in recent weeks has shown that while some people are not proceeding with their plans to release equity in light of the current uncertainty, there are more people who have not changed their decision,” concludes Kiri.  “If you have been considering releasing equity, we would recommend giving us a call to discuss your options, particularly as the interest rates are currently so low.  The health of our clients and our teams is of paramount importance to us during this time, so we will always act in the safest possible way while keeping your plans in motion.”

While we are not holding face to face meetings currently, our teams are working remotely and are available to discuss your plans either over the phone, via email or using video conferencing.  To discuss your equity release plans with Kiri or a member of the team you can call today on 023 8071 7438 or email kirisaunders-brown@warnergoodman.co.uk

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.