‘Silver splitters’ boost equity release market
Couples that decide to divorce later in life are increasingly choosing equity release as a solution to requiring two homes, according to Bower Retirement.
By releasing equity one partner can keep the marital home and provide a deposit for the other to put down on a new property, .
Although the number of divorces has dropped by around 30% since the peak in 2004, government statistics show divorce rates for women aged 55 and over are rising.
Andrea Rozario chief corporate officer at Bower Retirement, said: “Rising numbers of customers are increasingly women looking to use property wealth to stay in the family home as many will struggle to raise money for deposits for new houses. Equity release can help divorcees split an estate without having to lose the family home entirely while enabling the other partner fund a deposit for a new home.”
She added: “Indeed, while there have been developments in the mainstream mortgage market allowing older borrowers more flexibility, it is still problematic for the older generation facing divorce to secure mortgages.”
Will Hale, director at Key Partnerships, agreed. He said: “Splitting assets on divorce is challenging enough but for the over-50s there is the additional pressure of having to fund a new home when mortgage lenders are reluctant to help older borrowers.”
He continued: “Equity release enables one partner to remain in the home while allowing property wealth to be shared and is a growing alternative for settling property issues at divorce.”
The news comes in a record year for the equity release market and figures from the Equity Release Council put the sector on course to break the £2bn barrier – for the first time ever – in 2016.