Equity release mortgages set to boom

Lower levels of pension provision are set to make equity release mortgages increasingly popular among older people looking to fund their retirement, an expert has claimed.

UK residents aged over 60 will own housing equity worth £2.21 trillion by 2036, according to Graeme Marshall, chief executive of Sovereign Reversions, compared to the current level of £1.37 trillion.

With the UK population aging and final pension payments becoming less common, retirees are more likely to have to rely on their property equity to provide income after they retire, he argued.

"Older people typically own more valuable homes than the average and the vast majority have no mortgage debt left," he explained.

"For many, the value of their home will become an obvious source of income to help fund their retirement as traditional means of income and support are eroded," he added.

The Newcastle Building Society recently re-launched its service specifically aimingto help homeowners take out equity release mortgages to include home reversion schemes.

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