Equity Release in London – A Comprehensive Guide

Equity release is a popular option for homeowners in London who are looking to access the equity tied up in their property without having to sell it or move out. Equity release in London has seen a significant increase in popularity in recent years as more and more people look for ways to supplement their retirement income and fund their lifestyle.

One of the key advantages of equity release in London is that it allows homeowners to access a portion of the equity in their property without having to sell it. This means that they can continue to live in their home and enjoy the benefits of home ownership while also receiving additional financial support. Additionally, the equity release market in London is highly competitive, which means that there are many providers offering a range of products and interest rates.

Another advantage of equity release in London is that it provides a flexible solution for homeowners who are looking to supplement their retirement income. For example, some equity release products allow homeowners to make partial withdrawals as needed, while others offer a lump sum payment. This flexibility is particularly useful for those who are unsure about their future financial needs and want to have the option to access their equity in the future if needed.

Page last updated – 11th February 2023

Checked for accuracy by:

Chris - Equity Release Editor

House Prices in London

According to Rightmove, in 2022 properties in London had an overall average price of £723,738.

Most property sales in London during 2022 were flats, with an average selling price of £555,247. Terraced properties in London sold for an average of £833,262, and detached properties sold for an average of £811,601.

Overall, house prices in London were up 7% compared to 2021 and 9% up on the average of £665,295 in 2020.

If your house has gone up in value substantially over the last few years then equity release might be a good idea.

Equity Release in London: Your Options

In London, you have a variety of equity release options available, including:

  • Lifetime Mortgages: This type of equity release allows you to access the equity in your home as a lump sum or as a regular income, without having to sell your property or move out.
  • Home Reversion Plans: This type of equity release allows you to sell a percentage of your home in return for a lump sum or regular income, while retaining the right to live in the property for the rest of your life.

London Over 55’s

London is a diverse and rapidly growing city, and its population of people aged over 55 is no exception. According to the most recent data from the Office for National Statistics (ONS), the number of people aged over 55 in London was around 2.3 million in 2021, representing around one-fifth of the city’s total population.

The population of older people in London is expected to continue growing in the coming years, reflecting both demographic trends and the increasing life expectancy of the population. As people age, they tend to experience a range of physical and social changes, and the number of people aged over 55 in London will have important implications for a wide range of services, including healthcare, housing, and social care.

It’s worth noting that the picture of the older population in London is complex and varied, reflecting the city’s diverse demographic makeup. Older people in London come from a range of backgrounds and have varying needs and experiences, and it will be important to address the needs of this growing group in a way that is sensitive to their diversity.

In terms of the living arrangements of older people in London, around 60% are homeowners, while the rest are renters or live in social housing. This reflects the relatively high property prices in the city and the limited availability of affordable housing for older people, particularly in inner-city areas.

London Homeowners Over 55’s

In London, as in the rest of the UK, homeownership among older people has been increasing in recent decades. This is partly due to the rise in property values and increased access to mortgage finance, which has enabled many people to buy their own homes and build up equity.

According to data from the Office for National Statistics (ONS), the proportion of people aged over 55 who own their own home in London was around 59% in 2021. This is slightly lower than the national average of around 63%, but it still represents a significant number of older homeowners in the capital.

The number of older homeowners in London has been rising steadily in recent years, reflecting the increasing demand for property and the growing number of people reaching retirement age. The high property prices in London also mean that many older homeowners have significant amounts of equity built up in their homes, which can be used to support their retirement income through products like equity release.

It’s worth noting that the picture of homeownership among older people in London is complex and varies widely depending on factors like income, location, and age. While many older people in London own their homes outright, there are also a significant number of older renters, particularly in inner-city areas, who are less likely to have built up the same level of equity. Nevertheless, the number of older homeowners in London is likely to continue to rise in the coming years, driven by demographic trends and the increasing demand for property in the capital.

Choosing the right Equity Release plan for you.

When choosing an equity release plan, it’s important to consider your individual circumstances and to seek advice from a financial adviser.

However, with so many equity release providers and products available, choosing the right one can be a daunting task. Here are some of the key factors to consider when selecting an equity release provider:

Reputation and experience:

Research the reputation and experience of the provider, including how long they have been offering equity release products and how many customers they have helped. Look for online reviews and testimonials from satisfied customers.

Product range:

Ensure that the provider offers a range of equity release products that suit your specific needs, including lifetime mortgages and home reversion plans. It is important to choose a provider that offers a wide range of options so you can compare different products and find the one that best suits your financial situation.

Fees and charges:

Compare the fees and charges associated with the different equity release products offered by each provider. Shop around for the best equity release rates and look out for any hidden costs or charges that may not be immediately apparent. It’s important to consider the long-term impact of fees on the overall cost of the equity release plan.

Customer service:

Choose a provider that offers excellent customer service, including a dedicated case manager who can help you through the process of taking out an equity release plan. Check to see if the provider offers free, no-obligation advice and support.

Regulatory compliance:

It’s essential to choose a provider that is regulated by the Financial Conduct Authority (FCA), and a member of the Equity Release Council, which ensures that the provider is subject to strict rules and regulations. This provides additional peace of mind for consumers, as it means that the provider is operating within the law and that their customers’ best interests are protected.

Payment options:

Consider the different payment options offered by the provider, including lump sum payments or regular payments, and find out what happens if you want to make overpayments or pay off the equity release plan in full.

Choosing the right equity release provider can be a complex and time-consuming process, but taking the time to carefully consider your options and compare providers will ensure that you make the right choice. It’s important to work with an experienced equity release advisor who can help you understand the different products available and guide you through the process of taking out an equity release plan.

Pros and Cons of equity release in London

So what are the pros and cons of equity release for homeowners in London? Let’s take a look.

Pros of Equity Release in London:

  • No need to sell your home or move out
  • Extra money to fund your lifestyle or pay off debts
  • Potential to receive more money if you qualify for medically enhanced rates
  • Opportunity to stay in your home and enjoy the local community

Cons of Equity Release in London:

  • Reduction in the value of your estate
  • The loan plus interest will need to be repaid when you pass away or sell your home
  • Could impact your eligibility for means-tested benefits
  • Interest rates can be higher compared to traditional mortgages

Cost of equity release

It’s important to keep in mind that equity release does come with costs. According to Martin Lewis at Money Saving Expert, the average cost to set up equity release is between £1,500 and £3,000. Before proceeding with equity release, it’s highly recommended to seek professional advice from an Equity Release Council-approved adviser. They can help you choose the right product for you and ensure that you fully understand the implications and risks involved.

If you would like to find out how much money you might be able to get you can use our free equity release calculator. No personal details are required to use it so you don’t have to worry about anybody calling you.