At Oportfolio mortgages we handle all of our clients financial advice needs, from mortgage and protection advice to wills. But sometimes specialist lending and borrowing options need to be handled by outside experts in the field. That is why when we speak to borrowers who want to explore the option of equity release rather than straight mortgage borrowing, we work closely with The Equity Release Experts. Specifically equity release advisor Mike Hardy. Mike and his team help our clients on referral basis to refinance property and release equity so that we can help our clients with every financial need they have. Mike was kind enough to provide us and our clients with an equity release market update this morning, following the announcement of the latest inflation figure.
What Is Equity Release?
Equity release is pretty much exactly what it says on the tin. It is a way of allowing older home owners to release equity that they have built up in their property tax free in order for them to use this money for things like clearing debts, home improvements, and supplementing income. The amount of money you can release is based on your income (salary, pension etc.) and your age. Releasing equity is a very specialised type of borrowing that can have a lot of different implications and intricacies, especially if you are older, so must be handled by a specialist qualified advisor.
Releasing Equity In 2023 and Beyond – Mike Hardy’s Outlook
Speaking directly to Oportfolio Mortgages and looking towards the remaining 8 months of 2023 and beyond, Mike Hardy says:
‘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.’
Contact Oportfolio To Get the Ball Rolling With Equity Release
So there we have it, Mike Hardy sees a positive outlook for releasing equity in the future, despite obvious struggles in the market and an understandable feeling of reluctance to borrow. If you or anyone you know is considering equity release lending, then please give us a call here and we will be happy to recommend Mike and his team who can go through everything with you in detail.