A new report has revealed more homeowners are choosing equity release. This trend reflects a change in behaviour, with older property owners borrowing more to fund the cost of living.
The report by the Equity Release Council revealed a 32% increase in the year from Q1 2024 to Q1 2025. This has been driven by the changes to inheritance tax announced in the Autumn Budget, which impacted pensions and the agricultural sector. As a result, many wealthy homeowners are now utilising equity release as a vehicle for shifting funds into more ‘efficient’ inheritance tax investments, sometimes via beneficiaries.
What exactly is equity release, and what are the advantages and disadvantages?
Equity release basically means being able to extract money from your property without needing to sell it. This can be done either through a lifetime mortgage or a home reversion. To qualify, you should be over 55, own a main residence in the UK and have a minimum property value of circa £75,000.
The main benefits of equity release include easy access to cash while being able to remain in the property for life without fear of repossession. For homeowners who are asset-rich but low on cash, equity release offers an option to top up incomes, whether to fund living expenses or help family members. The downsides are that it is expensive, meaning higher interest, while it will hit the value of your assets and what you bequeath.
Anyone inheritance tax planning in Cheshire and considering equity release should contact our specialist team at Hartey Wealth Management today, to discuss the best path forward.
