Equity release 'might be on the decline'
Decreasing numbers of homeowners are to use equity release to fund their retirements, thanks to declining house prices.According to insurer MetLife, around one third of people feel "less confident" about this form of borrowing - a trend which could signal a decline in its popularity.The credit crunch has caused a constriction on mortgage lending, which means that home loans deal numbers are running at less than half their rates of 12 months ago.House price surveys from Nationwide and Halifax also claim that average prices have dropped by six per cent over the past year.Commenting, MetLife's chief executive Ed Gardner said: "The party is over for the moment at least in the housing market, with most commentators agreeing that prices will fall this year and possibly for another two years. "That ought to act as a wake-up call for people who have assumed that their property is their pension. Of course, equity tied up in your home can form part of retirement planning but, as recent events have shown, this does not provide a guaranteed pension. Saving into a pension is tax-efficient and should be a vital part of financial planning."
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