Will house price declines deter equity release?

People considering home equity release schemes may put off their plans owing to a fall in house prices.

House prices in England and Wales have fallen by an average 0.2 per cent in May, according to recent statistics published by the Land Registry.

The House Price Index also shows that the price of housing had increased yearly by 8.2 per cent. This figure does not reflect any change from that of the month before.

Houses in England and Wales are currently priced at an average £165,314. London headlined the list with the maximum annual increase of 14.2 per cent while properties in the north-east reflected the smallest price change of 1.8 per cent.

March also saw the total number of house sales in England and Wales increase by 37 per cent to 48,577, which is up from the 35,499 sales recorded in March 2009.

Equity release schemes could also take a hit from the recent emergency Budget. Chancellor George Osborne announced an increase in the capital gains tax from 18 per cent to 20 per cent.

Ashall Glover Financial Services are equity release specialists

Posted by Louise Tilston