The equity release market has another player, following the launch of Crown Equity Release, which di...
The equity release market has another player, following the launch of Crown Equity Release, which differentiates itself by offering capital to 60-years-olds, as opposed to the regular age limit of 70.
Mark King, managing director of Crown Equity Release, said the firm was initially founded in August 2001 with the aim of arranging three equity release cases a month. However, due to increased demand, it has been able to increase its target to 23 cases a month. He said: 'Rates have been falling and people have not been getting the pension they expected, so there is a need for this type of product.'
Changing demographic factors, he said, are also likely to increase demand. 'In the UK, 35% of people over the age of 65 have no direct ascendants to leave their assets to. If we assume there are four million elderly home owners, more than one million of them have no direct ascendants to leave their assets to ' this is a big market,' he said.
However, King believes equity release is an area where IFAs would benefit from more education. 'IFAs need to be more aware of the product. The main argument is that retired people want to leave their children something. IFAs see it as a reactive game, rather than proactive one, while there is also the stigma that children will miss out on their inheritance,' he said.
King said many people use equity release to improve their basic standard of living, rather than for essentials. He said: 'Our clients will be aspirational and will use the lump sum they obtain through our scheme to top up their savings, reduce potential inheritance tax liability, or enhance the quality of their lives by taking an extravagant holiday or the like. It's a question of enabling people to enjoy life when they have the time to.'
Crown offers equity release on properties at both ends of the market and does not have an upper limit on property values. It will also consider converted flats, properties owned by a third party, those occupied by more than two people and occupants in poor health.
