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Comment: No equity release without supply

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Downsizing is a major component of the equity release sector but there are insufficient properties suitable for older people

It is easy to focus on the younger end of the housing market when trying to fix age-old supply and affordability issues. Just as important, however, is ensuring the other end of the lending spectrum is equally catered for.

The equity release marketplace has been heralded as the next big thing although it is fair to say it has not always lived up to this lofty billing – at least in terms of volume and activity. That is not to say it has not progressed and evolved: significant steps have been taken that are starting to pay dividends at both ends of the market.

Recent research from Retirement Advantage shows 32 first-time buyers are being helped onto the housing ladder each week as a result of their relatives taking out an equity release product.

Meanwhile, figures from the Equity Release Council show homeowners aged 55+ withdrew a record £8.2m of housing wealth every working day during Q2.

Downsizing is a major component within this sector and can play a significant role in helping to address the UK’s housing shortage. But it is not without its own issues. Earlier this year a report from ILC-UK, called Generation Stuck: Exploring the Reality of Downsizing in Later Life, outlined a chronic undersupply of properties suitable for older people.

There continues to be an inadequate supply of the right kinds of property for both the younger and older generations. Lenders should help to address these issues where possible and intermediaries must advise on the right solutions.

However, the bigger supply question still lies in the hands of housebuilders, the Government and the support measures being introduced. Let us hope a period of relative political stability will help provide the platform to tackle this housing conundrum, whatever the age bracket.

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Bill McCabe is managing director, mortgages transformation, at Barclays

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