Insurance News Archive
Falling house prices 'should not concern people looking at equity release'
While the valuations of their properties may disappoint homeowners, they should not be worried about them in the context of equity release, according to an expert.
Keith Haggart, director of lifetime mortgages at Prudential, explains people will still be able to borrow the amount they require even if their house is valued below what they might expect.
He says the fall in equity belonging to homeowners aged over 65 - £7.7 billion in the last few months – follows the general downturn in property prices.
Mr Haggart insists this has not had a "direct impact" on the private equity release market and urged people not to be too disappointed if they feel their house is undervalued.
He continues: "They were, for instance, expecting a property to be worth £200,000 but an evaluation comes back at £180,000 - but that still means they can do what they wanted to do. If they wanted to borrow £30,000 then they can."
Earlier this month Prudential reported homeowners over 65 had £726.43 billion worth of equity in their homes.
Despite this and a £12.7 billion increase between February and May 2008, the value of property equity for this age group fell by £7.7 billion for the same period.
29 Aug 2008
