The good news...
Across the UK, more homeowners are exploring equity release as a way to tap into the capital tied up in their homes. This numerical rise has been mirrored by a change in the profile of the typical borrower – with the owners of higher value properties becoming increasingly likely to consider equity release.
Here at Aviva we’ve seen an increase in demand for equity release on multi-million pound properties during the past five years. But for advisers, these types of properties can be particularly challenging when it comes to looking for a suitable equity release provider.
Estates, farms or country houses with land often have complex split title deeds. They may also have aspects of commercial use – from livestock grazing, shooting and fishing rights to open gardens and weddings. And it’s not just in the country where complexities are encountered. Some multi-million pound properties in cities can present challenges of their own, such as tenanted flats within larger townhouses.
Making equity release an option for owners of high-value properties
In response to these changing client needs, we have made some significant changes to our lending criteria. We now lend against a more diverse range of high-value properties than ever before, with no limit on acreage.
Aviva is one of the providers who will allow an element of personal commercial use within a property. We’re happy to consider equity release to on houses where annexes – or other smaller properties within the grounds – are let out, subject to a short-term six-month tenancy agreement.
Our team of in-house qualified surveyors have expertise on deeds and complex land arrangements. This increases our ability to review properties on their individual merits and characteristics, rather than having a ‘one size fits’ all approach.
Larger lending: what’s changed?
So why are wealthier clients increasingly considering equity release? Quite simply, owners of high-value properties – those in the £600,000+ bracket – are sitting on substantial reserves of wealth. Equity release gives them a way to convert a significant proportion of this wealth into cash. This in turn empowers them to give their retirement planning a tangible boost by funding ‘living inheritances’ or gifting to the next generation.
Larger lending has traditionally been a niche area of the market. Now it’s a growing one, as clients turn to equity release for multiple reasons, including inheritance planning and gifting, and paying off interest-only mortgages. The changes to our lending criteria will help give them a broader range of options as they look to meet these aims.
Download our new lending criteria document to find out more.
To help your clients make the most of their property wealth, visit the Equity Release Hub.