‘Forced’ interest-only house sales on the rise

The research also found that 73% who are looking to downsize are older customers trying to pay off mortgage debt.

There is growing demand for potential solutions to interest-only mortgage repayment issues, such as lifetime mortgages, but just 50% of estate agents believing they know enough about the plans.

More than half (52%) say they would be more likely to suggest equity release as a solution if they had a partnership with an independent expert adviser.

Industry data shows around 10,000 borrowers a year between now and 2020 will come to the end of interest-only loans, with either a projected shortfall from their repayment strategy or no strategy at all.  

Will Hale, director at Key Partnerships, said: “Selling up to pay off an interest-only mortgage can make financial sense but it is worrying if older homeowners are being forced to sell and are not aware of all their options.

“Equity release enables people to stay in their home and not have to downsize, or even in extreme cases lose their house. Some lenders are engaging with equity release as a solution and we would urge others to follow.

“Estate agents are valued as a source of financial guidance and it is clear that those who can discuss equity release as an alternative to selling will be able to benefit from an additional revenue stream by referring potential clients to a specialist.”