At Oportfolio Mortgages, we help clients with a wide range of financial and property-related borrowing needs, including mortgages, protection and refinancing. However, some areas of lending require highly specialised advice. One of these areas is equity release.
For clients looking to explore equity release options rather than traditional mortgage borrowing, we work closely with specialist equity release advisers to ensure they receive the right advice for their circumstances. In particular, we regularly work with equity release specialist Mike Hardy, who support clients on a referral basis and provide dedicated advice around later life lending and equity release products.
Mike recently shared his thoughts with us on the current market and how the sector is evolving following recent changes in inflation and interest rates.
What Is Equity Release?
Equity release allows homeowners, typically later in life, to access some of the value tied up in their property without necessarily needing to sell their home.
The money released is usually tax-free and may be used for a range of purposes, including:
- Supplementing retirement income
- Home improvements
- Repaying existing borrowing
- Supporting family members financially
The amount available will usually depend on factors such as:
- Age
- Property value
- Existing borrowing
- Overall circumstances
Equity release is a highly specialised area of lending and is not suitable for everyone. It can have important long-term implications for:
- Estate planning
- Inheritance
- Future borrowing
- Benefits eligibility
This is why it is important to seek advice from a qualified equity release specialist before making any decisions.
Releasing Equity: Mike Hardy’s Outlook
Speaking to Oportfolio Mortgages about the current market, Mike Hardy commented:
‘Although the official figures for quarter 1 are yet to be published, I fully expect to see a reduction in borrowing of over 50% from last year. With the lowest rate being 6.5% at the start of the year, I’m sure it won’t come as a shock to you that clients were very much deferring the loans and deciding not to proceed at the beginning of the year.
Things look far more positive for quarter 2 as the general trend in recent weeks is that the rates are coming down. The lowest rate now on offer is currently 5.3% and although people will still defer at these terms, any needs driven and older clients will probably start to go ahead. I personally have seen an increase in activity of clients now wanting to have meetings to look at this in more detail.
With regards to rates, my opinion hasn’t changed much. I highly doubt that we’ll see a rate starting with a 2 again any time soon. Maybe a 3, and hopefully a 4 by the end of the year. All still depends on how quickly the government can get inflation under control. The recent decreases in rates, I think is due to lenders starting to take a bit of profit out of their margins to try and stimulate loans and the market as gilts yields have been pretty consistent since January.
With such a large reduction in written business and the fact that not many of the lenders announced large redundancies, it is inevitable that they must be running at a loss currently and with the natural lag in acquiring business, they must act fast before half of the year has gone.’
Is Equity Release Right For You?
Equity release can be a useful option for some homeowners, particularly those looking to access property wealth later in life.
However, it is important to fully understand:
- The costs involved
- How interest is applied
- The long-term impact on your finances and estate
In our experience, specialist advice is essential when considering later life lending options.
Speak To Oportfolio About Equity Release
If you are considering equity release or later life lending and would like to understand your options, feel free to get in touch. At Oportfolio Mortgages, we work closely with trusted specialists who can provide expert advice tailored to your circumstances. We would be happy to introduce you to Mike Hardy for a more detailed discussion.
Equity release mortgages in the UK are regulated by the Financial Conduct Authority (FCA). Many equity release products and advisers are also members of the Equity Release Council, whose standards provide additional consumer protections beyond FCA regulation. Advisers arranging equity release must hold specific FCA-recognised equity release qualifications.
