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Equity release market 'is growing'

Homeowners in the UK are increasingly choosing to release equity from their homes to fund their retirement, according to a new report.

Defaqto stated that equity release is now playing a greater role in retirement planning and that the market is at a "crucial stage" in its development.

The firm highlighted various reasons for the change in people's financial habits, such as under-funded pensions and low annuity rates.

Furthermore, demographic issues, pensioner debt and historically high levels of equity in the housing stock were also cited as important factors.

David Black, head of banking at Defaqto, commented: "Although it remains essential that people explore alternatives to equity release as well as its possible implications, equity release will become an increasingly relevant option in future retirement planning."

Although he said that equity will not suit everyone, he did state that it would increasingly provide a solution for many people.

The comments came shortly after the Financial Services Authority took over the regulation of how equity release products are marketed.

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24/04/2007 15:54:05

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