Property market 'improvements' could boost equity release

More homeowners may be set to benefit from equity release schemes in future after a relatively rosy picture was painted of the UK property market.

Although mortgage activity remains "subdued", it is now "comfortably higher" than a year ago, according to Paul Samter, chief economist at the Council of Mortgage Lenders (CML).

"With the gradually improving economic backdrop and interest rates still low, we continue to expect a gentle improvement in market conditions later in the year," he commented.

However, Mr Samter went on to point out that financial institutions will need to find alternative funding sources from next year, when official support streams start to tail off, potentially affecting the property market.

Post Office mortgage customers may be among those who will be able to build up some much-needed equity in their homes in future, after the lender announced a reduction in the rates of its fixed-rate products for the fourth time this year.

The Post Office's new two-year fixed rate mortgage product is set at 3.15 per cent (75 per cent LTV), while its five-year deal comes in at 4.84 per cent (80 per cent LTV).

Ashall Glover Financial Services are equity release specialists