Long-term growth of house prices could boost equity release market

A range of properly considered measures could be put in place to deliver sustainable growth in the housing market, it is believed, which in turn could boost the equity release sector.

More research needs to be done to identify the particular causes of consumer detriment in the property market, according to Bernard Clarke, communications manager for the Council of Mortgage Lenders.

Equipped with that evidence, he said it will then be possible to create "the right sort of proposals, that are properly tested by cost-benefit analysis, to make sure that we address the problem in the right way".

In a recent speech made to the CASS Business School in London, Lord Adair Turner, chairman of the Financial Services Authority, suggested setting maximum limits on loan-to-value ratios in order to curb asset price bubbles in commercial or residential real estate.

But Mr Clarke has stated that credit control is not the appropriate approach, as it risks excluding some customers from mortgages despite the fact they would be able to meet the commitment.

Ashall Glover Financial Services are equity release specialists