Hackney is just one borough of Greater London that has seen a drastic change in property market values in recent years. A lot of this has to do with the Olympic effect. The Olympics brought back hope that London was in recovery or would soon recover, thus helping the rest of the UK to end the recession. Combined with the Cross Rail project nearing completion in 2018, urban life is sparkling right now. There is no longer a need to be in rural areas for affordability, when better transportation and more return on property investment can be found. Hackney has seen an increase of 44 per cent and is considered one of the fastest growing areas of Greater London right now. For over 55s living in Greater London experiencing housing price increases, equity release schemes are becoming imperative topics.
Hackney is Still Most Affordable
Housing prices have yet to reach over £400,000 in Hackney. They are getting ever closer; however, the houses are still more affordable than inner city London where prices are now over £1 million of late. Even places like Whitechapel are already over the £400,000 market and rising in leaps and bounds. When you consider that Hackney still has plenty of room to grow it brings the sales of homes in Hackney to the forefront of the discussion.
As gentrification of London and areas like Hackney continue, there is definitely more to the story. First time home buyers are just a small portion of individuals getting in on the housing boom.
Over 55s also have much to benefit in areas like Hackney, Queensbridge Ward of Hackney, and Dalston. When housing prices increase, those who already own property are seeing their valuations increase.
The Situation of the Older Generations
It is no surprise that during retirement money is not rolling in. Options from retirement pensions, government stipends, and retirement savings accounts set up prior to retirement are the ways over 55s pay for their retirement. However, money is not an endless product to gain during these years. It can start to dwindle. Property owners can suddenly be very wealthy in housing, but very poor in cash. Asset rich, cash poor is the term commonly used and affords a gateway to the London equity release marketplace.
Even wealthier Londoners can hit a rough spot in which they are limiting their expenses enough to further push their retirement funds. With the possibility of living longer, inflation on products like household utilities, consumables and hundreds of other expenses that one might have a solution is necessary.
Luckily, the housing market and things like gentrification are making it very clear for retirees. They are clearly able to see the potential of equity releases such as lifetime mortgages. These equity release mortgage products allow a homeowner to tap into tax-free cash through different types of schemes such as drawdowns, interest only, enhanced, lump sum roll-up products or even 2nd homes.
Suddenly the cash poor have money to spend again by using a release of equity from their property. With housing prices increasing in locations like Hackney it gives homeowners the potential to gain even more from their home and equity stores than if prices remained the same. Hackney equity release sales are on the increase and house prices coupled with gentrification has been the catalyst.
For some of these over 55’s in areas like Hackney, now is the time to access this equity locked up with their bricks & mortar. Interest rates are still under 6% or lower depending on the lifetime mortgage provider. Currently, the Aviva lifestyle flexi plan can go as low as 5.63% if you don’t take the option of a free valuation and qualify for the enhanced lifetime mortgage option. The Aviva equity release schemes enable homeowners to take more in equity over the whole term since the rate is low, fixed, and housing appreciation is happening with a bang.
Calculating your Options
A free equity release calculator will help you determine your options for London equity release. There are also a few qualifications that can determine one product over another. First interest only lifetime mortgages require a monthly payment of interest. The capital remains unpaid until death or you decide to sell the home. You can also repay it whenever you have the funds. The point is you need disposable income that can cover the interest payment.
Another option is the enhanced lifetime mortgage that is one mortgage product where you can be gravely ill and take out money. The assumption is your illness will lower your life expectancy; therefore, you can use more money to enjoy the rest of your life.
A drawdown mortgage allows you to tap into an equity account as and when you need it. This is most helpful in limiting the amount you spend and that accrues interest. The last option is a roll-up plan in which interest is fixed and approximately doubles the capital amount every 11 to 12 years.
When money is necessary in places such as Hackney and you have a property gaining in value, a drawdown option can be well worth it. Yet, check the free equity release calculator to see if something else appeals more and if you are over 55 & looking to move to boroughs such as Hackney then contact one of our specialist London born equity release advisers on 0800 678 5159.