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1 in 5 equity release customers 'shocked' with low valuation

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1 in 5 equity release customers 'shocked' with low valuation

Research from Bower Retirement Services has found that almost one in five people who take out equity release have received lower than expected property valuations when they take out plans.

Advisers estimate that 19% of customers over value their homes before starting an application, despite the average value of homes increasing.

Around 70% of advisers questioned say they have seen increases in the average value of homes owned by customers they deal with and 21% are seeing substantial increases in property values.

14% of advisers say the average house price of customers they deal with is £500,000 or more, underlining the expansion of the equity release market.


Bower’s research shows advisers expect continuing growth in the equity release market during 2016 but there is confusion about the possible impact of regulatory changes from the FCA review of the market and the Financial Advice Market Review.

Around 35% of advisers say they are unsure if the FAMR will be positive for the equity release market while 36% are not convinced the FCA review looking at barriers to entry and the market in general will be positive.

Andrea Rozario, Chief Corporate Officer at Bower Retirement Services, said: “Lower than expected valuations are an emerging issue for the equity release market with many customers over-estimating their property’s worth.

That can come as a shock when people are making the decision to access their property wealth as part of retirement planning underlining the need for specialist advice and service throughout the equity release process. That becomes even more important as average property values of equity release customers are continuing to rise with increasing number of customers with houses worth £500,000 or more recognising how property wealth can help with retirement planning.”

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Latest Comments

CommercialTrust
CommercialTrust 20 May 2016

With the bulk of the market controlled by large developers, profit rather than necessity determine the pace at which homes are built. There are hundreds of thousands of plots that have planning permission...

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Johna
Johna 20 May 2016

"Easier said than done" is what I would say. Of course, it would be more than great to have more in quality and affordability, but I do not trust talk anymore.. What is said is not what is happening.

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Johna
Johna 20 May 2016

in my humble opinion being fair like THE most important! I myself have had bad experience with unfair landlords... not to mention that I know how to do a proper end of tenancy cleaning since I am a fantastic...

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richardrawlings
richardrawlings 18 May 2016

NB - even if we doubled our commission levels in the UK, we'd still be by far the cheapest agents in the entire world.

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Agent_PeeBee
Agent_PeeBee 18 May 2016

Clueless. Someone needs to take these people's computers away from them so they can do no more harm than they already have.

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richardrawlings
richardrawlings 18 May 2016

Nonsense! The cost of selling a house nowadays has little bearing on the fees charged. Don't believe your own spin on this. Fees have spiralled down to pathetic levels in areas where weak agents have allowed...

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Simon Oliver
Simon Oliver 16 May 2016

The best solution is to buy a property that has built-in income generating potential: a nice house with a couple of gites in the grounds is a good start. In France, the rune of thumb is that one 2-bedroomed...

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WPD
WPD 12 May 2016

I suggest the answer is to have the notary system being one legal person who represents both parties. Having experienced it a couple of times in France it was a dream compared to our dysfunctional system....

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warren
warren 03 May 2016

It's enough to make me weep into my Pimm's :(

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james anderson
james anderson 03 May 2016

The sad demise of the croquet lawn...

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CommercialTrust
CommercialTrust 11 Apr 2016

".. the stricter lending criteria will reduce the amount of buy-to-let lending by 10% to 20% in three years’ time." The PRA was actually referring to cumulative approvals here. What they believe is that...

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Paul Watson
Paul Watson 07 Apr 2016

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