Safe Home Income Plans (SHIP), the equity release industry body, says people need to be reassured that they can still use equity release plans despite falling house prices.
SHIP says customers should not abandon plans to release equity purely because the value of their property is declining as its members offer guarantees to keep consumers safe.
Andrea Rozario, director general of SHIP, comments: “The current situation in the property market does not mean the door is closing on equity release - far from it. Falling property values do however make the very high standards that SHIP members must adhere to all the more important to consumers.”
SHIP’s members are required to offer a no negative equity guarantee, meaning customers will never owe more than their house is worth, no matter how far the property market might fall.
In addition, SHIP members must offer security of tenure, so consumers can remain in their home for the rest of their lives.
SHIP also points out equity release is a long-term proposition and is far less affected by short-term house price movements than other lending markets.
Rozario explains: “There is an argument for those planning to access the value in their property to move quickly if their need is imminent. Those looking to the longer term should take comfort in the longer term trend in property values which is always up.”
She says consumers and advisers should look for the SHIP logo to ensure any equity release products they use are covered by these essential guarantees.
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