The impact of property price inflation on a client’s decision to take out an equity release plan is often understated by brokers.
It is never overlooked by clients who often enquire about accessing cash because of their property has grown in value in recent years.
Of course this can work in the opposite direction too, with clients being concerned in times of negative or zero house price inflation.
Predominantly they are worried about the likely cost of the plan over their life if house prices don’t rise, but they are increasingly worried about how much of the house they can pass on to the next generation.
Historically, this problem was often solved using a reversion-style product, where selling a proportion of the home ensured a slice for distribution in line with the will.
More recently, mortgage products have been developed which offer the opportunity to protect a proportion of the house for inheritance by the next generation.
This can offer peace of mind in uncertain times and is a feature clients are usually willing to discuss, particularly in these times of benign house price growth.