Interest-only borrowers and elderly homeowners needing long-term care will drive growth in the equity release market, the Equity Release Council chairman has said.
Nigel Waterson said: "We know each year over the next ten years or so there will be a huge number of people with interest-only mortgages coming to term and only a small proportion of them have any idea how to pay it off.
"There is a big headache for people and possibly the only solution is equity release."
Government proposals to make it easier for local authorities to pay for residents' long-term care and recover the costs through the sale of their home after death, would lead to a surge in demand for independent advice, he added.
"Once this scheme is up and running, people will need advice and they are not going to get it from a local council. It will increase the demand for independent advice for independent financial advisers, mortgage advisers and others."
The Care Bill will allow councils to charge interest on otherwise costly deferred payment schemes in order to encourage greater awareness about the option for elderly relatives.
However, Waterson added his voice to International Longevity Centre head Baroness Greengross's concerns that deferred payment schemes would come to resemble financial products but without the appropriate regulation.
He said: "The deferred payments scheme is quite a good one but it would be quite wrong if it were regulated under the Consumer Credit Act and not subject to the same regulation as equity release."
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