House prices grow at nearly
double the rate of retirees' income
House prices have risen nearly twice as fast as UK retirees'
income in the last fifteen years, recent research by the Equity
Release Council revealed. Data from the Land Registry and Office
for National Statistics show house prices have soared by 91% since
1997 to £229,610. In contrast, the average retiree's income has
risen by just 46% from £13,786 to £20,129.
Although recent instability within the property market permitted
retirees' incomes to regain some ground on house prices in terms of
their rate of increase, property's overall growth rate remains
higher in the longer term. Despite property values falling by 8% in
real terms over the last five years and retirees' income increasing
by 4%, income failed to rival the overall growth rate of property
values since 1997.
One answer to this is to use the equity in one's home as an
additional source of income. Property is now very often people's
biggest and most secure financial asset, with a far greater return
on their original investment. This is especially true for those who
have remained in the same home for a number of years, during which
the property market has boomed, meaning they have accumulated a
large amount of equity in their property.
Equity release can provide access to this tied-up cash as an
alternative to selling, allowing owners to remain in their own home
while relieving financial pressure. Either a lump sum or a reserve
facility to draw down extra cash as or when needed can be arranged.
Specialist equity release advisers can help customers choose which
source of retirement income would best suit them.
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