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Rate rise won&#39t have adverse effect on equity release, says KRS

Key Retirement Solutions says the Bank of England base rate rise should not have an adverse effect on the equity release market.

Colin Taylor, managing director at KRS, says: “Whilst we have recently seen the Bank of England base rate increase on four separate occasions over the last few months, we have actually seen interest rates for equity release plans come down during this period. This is because of increased competition from more product providers entering into the equity release market.

“We believe that the plan providers will not be able to absorb a further increase and that they will pass on the full quarter of a percent to the consumer.  However, we believe that this will not adversely affect the equity release market as a whole. Indeed, if property prices now start to plateau we may now actually see the popularity of reversion plans start to increase and assist in further expansion of the market.”


He adds: “As most equity release mortgages are taken out at a fixed rate of interest, this latest increase is not likely to affect the majority of equity release planholders. However some banks and building societies will lend to the over-60s on an interest only basis, and it is likely that these people will be affected and see an increase in their monthly repayments.  They will not witness any change during the fixed rate term placed on the mortgage, but a full 1% increase during the last six months means that those people now currently paying at a variable rate will be affected.”


Savills sells UK&#39s largest mortgage

Savills Private Finance has overtaken Chase De Vere Mortgage Management as the broker behind the largest-ever mortgage arranged in the UK – a staggering £15.2m deal. The loan, arranged by Savills&#39 managing director Mark Harris, was taken out by an unnamed foreign businessman on a five-storey property in plush Belgravia in central London. Chase De […]

Housing havoc predicted

Prudential is predicting a property nightmare for baby boomers who are relying on their homes to fund their retirement. A report commissioned by the Pru from Datamonitor called Equity Release in the UK suggests four million homeowners are relying on their properties to form part of their pensions in retirement and that if they all […]

Countrywide interested in B&B assets

Countrywide is the latest estate agency to declare an interest in buying Bradford & Bingley&#39s estate agency and surveying divisions which are being disposed of by the group because they are not core to the business. Mortgage Strategy exclusively revealed on May 17 that B&B&#39s estate agency was to be sold off days before the […]

Pink launches fixed buy-to-let product with MEX

Pink Home Loans has launched an exclusive fixed rate buy-to-let mortgage in association with Mortgage Express. The product offers an initial pay rate of 5.89% fixed until September 3 2007. The product offers flexible features including overpayments, underpayments and drawdown facilities. Buy-to-let investors can also save £150 off the application/ valuation fee on loans over […]


Case study: administration — implementing a management log

Our client is a leading video game and publishing company best known for its console role-playing game franchises. The client provides a number of benefits, at varying levels and cost that attract a P11d liability. With the absence of a management log to track data for benefit movements, enormous administrative and therefore cost implications were occurring each year just to comply with P11d reporting requirements.


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