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

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

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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