The smart money can be in equity release

However, detractors of equity release repeatedly call the lifetime mortgage a 'last resort', implying that equity release can only be a smart move in very particular circumstances. This assertion that lifetime mortgages should only ever be used as a 'last resort' has been perpetuated in the media, but in reality equity release can be a smart move in numerous situations. And our customers realise this.

If you were to only believe the equity release naysayers, you wouldn't be blamed for thinking that most people are cashing in their equity simply to squander on a fleeting life of luxury. Time and again equity release is viewed as homeowners 'selling the family silver' and 'blowing the kids inheritance', but beyond the fact that homeowners who have worked their whole lives to secure a property for themselves should be allowed to do as they wish with their money, the truth is very few people are spending irresponsibly.

According to data released by LV=, the most popular reason customers tap into their housing wealth is not holidays, new cars or the classic but cliché worldwide cruise. No, in fact most lifetime mortgage customers, 31% in fact, are using the money they release to reinvest in their home!

Home improvements continue to be the most popular reason customers take out a lifetime mortgage, and this is smart for a number of reasons. Firstly, and perhaps rather obviously, adding an extension, conservatory or simply getting those nagging repairs properly completed, makes the home a nice place to be. Plus with most elderly homeowners staying in their property much more than their younger relatives, don't they deserve a place they can feel comfortable?

Secondly, investing in improvements can make the home a more hospitable place to host family and friends, something that becomes ever more important the older we get as loneliness and seclusion can become real emotional issues. With the family flying the nest years earlier, and work life coming to an end, having a home that can comfortably host others is one key to happiness in later life.

Next, many equity release customers are not only improving their home but thousands are also using the money they release to alter their property to their own specific care needs. Be it widening doorways or adding stairlifts, equity release can ensure that customers can care for themselves for longer in their own property – something most people desire. What's more, with the cost of care continuing to climb, plus the numbers of people needing care increasing even faster, giving people the power to support and care for themselves has wide societal impacts – and equity release is one of the factors returning power to the people.

Finally, the home improvements being made by equity release customers are actually adding to the value of people's properties. Rather than squandering their housing wealth on trivial things, something the mass media would have you believe is the norm, most customers are in fact reinvesting in their home and adding further value to their biggest asset! A brand new conservatory, for example, can yield a 100% or more return on investment; but even improving something as small as a bathroom can yield a 50% return.

Ultimately, equity release is being accessed by financially-savvy and forward-thinking homeowners who realise that they have amassed great amounts of equity through historic house price inflation, but aren't about to waste this opportunity to improve their lives. Re-investing in the home makes life easier and equity release is there to help facilitate this retirement comfort.