The equity release market has another player, following the launch of Crown Equity Release, which differentiates itself from other providers by offering capital to 60-year-olds, as opposed to the regular age limit of 70.
Mark King, managing director of Crown Equity Release, said the company was initially founded in August 2001 with an aim of arranging three equity release cases a month. However, because demand has increased, the firm has been able to increase its target to 23 cases a month. He said: ‘Interest rates have been falling and people have not been getting the pension they expected, so there is a need for this type of product.’
King added that changing demographic factors are also likely to increase demand as there are now more individuals with no direct ascendants.
However, King believes that 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. There is also the stigma that children will miss out on their inheritance,’ he said.
King said that 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 improve the quality of their lives by taking, for example, a luxury holiday, buying a new car or improving their homes. 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.