With the property sector being challenged to a level not seen since the 2008 crash, an equity release expert warns it is likely we shall see older homeowners taking potentially drastic decisions to raise capital and protect their financial position.

The Founder of the Solihull-based Acclaimed Mortgage Consultancy, Sandy Ameer-Beg is therefore urging older homeowners to consult the expertise of a specialist before committing to any decisions regarding equity release during the Covid-19 pandemic.

As a reported 37% of people across Britain are having their incomes halved due to the unprecedented impact of Covid-19, brokers are predicting a sharp increase in equity release enquires in the near future as homeowners look at ways to resolve their loss of income.

Equity release schemes are adopted for a variety of reasons. They allow homeowners over the age of 55 to access their property’s value in return for cash during retirement but it is a lifetime commitment.

Citing reasons such as people seeing their pensions and investments hit due to the economic fallout from the stock market, or family members look to assist one another through financial difficulty, Ameer-Beg shares the view with her fellow experts that growth will return to the equity release market over the coming weeks and months ahead.

However, in response to the growing number of advertisements promoting equity release as a quick-fix, she has suggested that whilst applying for equity release may provide consumers with a solution in the short-term, a lifetime mortgage can come at a cost later down the line and should only be done after all other options have been explored.

Ameer-Beg commented:

“The current crisis is already invoking reactive decisions without sound consideration of the long-term implications of committing to certain products, so it is imperative that brokers consider all the options available for their clients before going down a definitive route.

“Having seen an increase in advertisements encouraging homeowners to ‘raise quick cash’ through utilising their property, this will only serve to provoke poor and ill-informed decision making as a huge number of consumers will inevitably still be in panic-mode due to the loss of a steady stream of income.

“Brokers have a duty to establish if the client is raising funds for the right reasons and to act as a soundboard during what is a hugely worrying period, to ensure that they avoid settling for a poorer solution.