London homeowners turn to equity release
Georgina Smith is managing director of Stonehaven
According to the latest ONS statistics, house prices in London increased by 9.4% between January and September this year, making London property prices amongst some of the fastest growing in the world. This has been clearly reflected in Stonehaven’s London client base. In 2008 the average property value of a Stonehaven equity release customer based in Greater London was £436,729 but that has now risen to over half a million pounds, at £510,339. What’s more, for customers owning a house in Central London the figure has reached £645,040.
When Londoners are sitting on such a large nest-egg, it’s logical for homeowners in the region to want to free-up some of their property’s capital by releasing a proportion of its value through equity release, allowing them to use the money to enhance their lifestyle or help out a family member. Faced with very low returns on savings and a rising cost of living, especially prevalent in Central London, a lifetime mortgage provides an increasingly flexible solution giving over 55s a financial boost without needing to leave their home.
The reasons for over 55s choosing lifetime mortgages has changed over the years and our products have evolved to suit these emerging needs. As the equity release market expands, older homeowners are looking to this flexible and innovative financial solution. It can be used to tackle many financial planning challenges including: buying a new property, helping children to get on the housing market, clearing existing interest-only mortgages, inheritance tax planning or retirement planning.
Lifetime mortgages can offer an effective solution for a growing number of over 55s who want to enhance their lifestyle, or simply to continue the lifestyle they have been accustomed to while they were working, without being forced to leave their home. We are constantly assessing our product offerings; this allows us to react to trends in the market. In response to the rising value of London properties, we took the decision raise our maximum loan size. The maximum amount a homeowner can unlock from high value properties has now increased to £750,000. For those who bought a property in London over a decade ago, its value is likely to have increased considerably. Raising the borrowing cap means that our customers can reap the rewards of living in a prime postcode while remaining in their homes.
While rising houseprices can often be regarded as a negative trend sometimes preventing aspiring homeowners from accessing the booming housing market, we are busy finding ways to help those that are lucky enough to own a London home to benefit from the increased amount of equity that’s tied up in their home.