Equity Release in London

Equity Release In London | April 2024

Homeowners in London have access to the value of their property through Equity Release, a financial option. This could come as a one-time payment or a consistent monthly payment. It is a method of taking equity out of your house while you are still a resident. 

Equity release is a significant financial commitment, so seeking professional advice from a financial adviser before moving forward is advised.

Table of Contents

Understanding Equity Release

Equity release is a method by which senior citizens can withdraw tax-free money from the equity in their homes. Home reversion and lifetime mortgages are the two ways to release equity. 

In contrast to a home reversion plan, which involves selling all or a portion of your home in exchange for a guaranteed lifetime lease and a tax-free lump sum or regular payments, a lifetime mortgage is a loan secured against your property.

The most common form of equity release is a lifetime mortgage, which allows you to keep your home while not requiring you to make regular payments. Only when you pass away or need long-term care are the loan and rolled-up interest paid back.

Most lifetime mortgages provide a no negative equity guarantee, ensuring that your heirs won’t inherit an unpaid debt from you. 

On the other hand, home reversion entails giving a provider of home reversion plans a portion of your entire property. You will no longer be the sole owner of your home, but you may continue to live there rent-free until you pass away or enter a nursing home.

The Legal Framework in London

In London, equity release products are subject to regulation by the Financial Conduct Authority (FCA). All UK equity release providers and advisers are subject to the same stringent regulations. 

The Equity Release Council, a national trade organisation for the equity release industry in the United Kingdom, further protects consumers. It lays out requirements and guidelines that all members must follow. 

This includes making sure that no equity release plan has a guarantee against negative equity. This guarantees that your total debt will never exceed the value of your home and that no obligation will be passed on to your heirs or estate.

You can also watch this video on Youtube here.

Try Age Partnership’s equity release calculator and estimate how much money you could release from your property.

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Types of Equity Release Schemes

Lifetime mortgages and home reversion plans are the two main categories of equity release plans. The amount you can release is based on your age and the value of your property, and lifetime mortgages let you borrow money against the value of your property. 

You continue to own your home, and since the loan amount plus interest is paid off when the house is sold, no monthly payments are typically required. 

On the other hand, home reversion plans entail giving away all or a portion of your property to a reversion business in exchange for a one-time or ongoing payment. You can live there for the rest of your days without paying rent. 

You won’t be the sole owner, though, and the reversion company will gain from the portion you sold if the value of your property rises. 

Equity Release in London

Some of the Best Equity Release Interest Rates as of 18 April 2024

The table below shows you some of the best equity release rates for lifetime mortgages from some of the leading equity release providers in the UK. 

Provider NameProduct NameInterest RateType of productOffers
JustJust For You – J1 Green5.35%FixedFree Valuation
No application fee
JustJust For You – J2 Green5.40%FixedFree Valuation
No application fee
Scottish WidowsFR15.50%FixedCashback
Free Valuation
No application fee
JustJust For You – J25.50%FixedFree Valuation
No application fee
Standard LifeHorizon 200 Drawdown5.50%FixedFree Valuation
Standard LifeHorizon 200 Drawdown Fee Free5.55%FixedFree Valuation
No application fee
Scottish WidowsFR25.57%FixedCashback
Free Valuation
No application fee
Standard LifeHorizon 220 Drawdown Fee Free5.59%FixedFree Valuation
No application fee
Standard LifeHorizon 240 Drawdown5.59%FixedFree Valuation
More 2 LifeCapital Choice Ultra Lite Drawdown 15.60%FixedFree Valuation
No application fee

The equity release rates have been sourced by UK Care Guide from the Equity Release Supermarket website. These rates may have changed since this table was created and should be taken as indicative only. There may be other providers not listed on this table that could offer better deals.  In addition, the providers and products noted may not be right for your particular circumstances.  Therefore, they should only be taken as a guide, and we cannot guarantee their current accuracy. Please also note that we do not provide advice on or endorse any particular product listed here. The rate you are offered will depend on your individual circumstances and subject to lender approval. Therefore, we strongly recommend that you speak to an equity release adviser, who will be able to provide you with information on the latest rates that apply to you.

Speak To An Equity Release Specialist Today

Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements and see what deals are available to you.

Eligibility for Equity Release

You must be older than a certain age to be eligible for equity release in London; for lifetime mortgages, this age is typically 55, and for home reversion, it is 60 or 65. You must own the property on which you reside and keep it in good condition. 

If you have one, you must be able to pay off your existing mortgage or secured loan with the equity release. 

Application Process in London

Speaking with an equity release advisor is the first step in the application process in London. 

They will review your requirements and situation, consider any alternatives, and review the different equity release plans and how they might affect your tax situation and ability to receive means-tested benefits. 

They will give you a customised breakdown of the benefits and dangers of equity release.

The value of your home must then be determined to know how much equity you can release. 

The equity release provider will then make a formal offer outlining the terms of the equity release plan. If you choose to move forward, a lawyer will handle the legal aspects. The money can be released once all the paperwork is finished.

Pros and Cons of Equity Release

Homeowners who don’t want to move can access the wealth they’ve built up in their property through equity release. It can offer a one-time payment, a consistent income, or both. 

Later in life, it can be a valuable tool for funding retirement, care expenses, home improvements, or even helping family members climb the housing ladder. 

It’s only appropriate for some, though. Your ability to receive means-tested benefits may be impacted, and your inheritance may be diminished. There may be fees involved, as well as interest rates that are higher than those of conventional mortgages. 

If you want to finish the plan early, there may be early repayment fees.

Impact on Inheritance and Benefits

Your estate’s value and the inheritance you leave behind may be impacted by equity release. When you pass away or enter long-term care, the home is typically sold to pay off the loan, so your beneficiaries may have less left to inherit. 

Some plans, however, provide an inheritance protection guarantee that enables you to ring-fence a portion of the value of your property for your heirs.

Your eligibility for means-tested benefits may also be impacted by equity release. Consultation is essential before taking out an equity release plan if you receive state benefits.

Seeking Professional Advice in London

It’s critical to get expert guidance before choosing an equity-release product. You can learn about the various options and their potential effects on your finances and inheritance from an equity release adviser. 

They can give you a customised illustration and direct your thought process. In addition to consulting a financial advisor, it’s crucial to consult independent legal counsel and talk to your family about your plans. 

As a significant financial decision that will affect your future and your family, doing this will ensure that you are fully aware of all the ramifications of releasing equity from your home. 

Always choose advisers and providers who are Equity Release Council members and are subject to Financial Conduct Authority regulation. 

By doing this, you can be sure you’ll get the best advice possible and that the equity release product you choose complies with all applicable laws and regulations.

Equity Release Costs and Fees

Equity release plans have a range of expenses and fees. Your equity release adviser typically charges a fee for their professional equity release advice. This cost covers their time evaluating your situation, advising on the best equity release product, and managing the application. 

Additionally, legal fees go towards the price of the required independent legal counsel. This is a crucial step in the equity release process to ensure that you fully comprehend the terms and conditions of your equity release agreement. 

There could be an early repayment fee associated with some equity release plans. You would be responsible for this fee if you chose to pay back your equity release plan earlier than anticipated. 

Before moving forward, it’s essential to know potential fees because the sum varies between providers and products.

London Equity Release Providers

There are lots of equity release companies in London. Each provider provides various equity release products with varying features and interest rates. Some service providers might let you choose between making monthly payments and allowing the interest to accumulate. 

Always remember to compare various products and providers before making a choice. An equity release calculator is a helpful tool in this process, showing how much you could borrow and how different plans and interest rates affect your overall debt over time.

It is safer to select an equity release provider who is a member of the equity release council. 

The Council ensures that each of its members abides by a stringent code of conduct, which includes ensuring that there is no negative equity and that you have the right to live in your home for the rest of your life.

Equity Release and Your Property

Your property’s market value and age will determine how much you can release from it. The property’s value is established by a professional valuation, considering elements like the property’s location, size, condition, and any improvements made. 

If you already have one on the property, your existing mortgage must be paid off first, with money from the equity release or other savings. After that, you can receive regular payments or a tax-free lump sum for the remaining equity in your home.

Please be aware that releasing equity will lower your estate’s value and might affect the inheritance you leave. 

On the other hand, some equity release plans give you a choice to protect a portion of the value of your home, enabling you to preserve an amount of the home’s future value for your loved ones. Moving to a new property may be impacted by equity release. 

As long as the new property satisfies the provider’s requirements, most plans allow you to transfer your equity release to another one. An early repayment fee might be assessed if the new property doesn’t meet these requirements or you don’t want the program.

About London

The county of Greater London is in the southeast of England, where London, the capital of the United Kingdom, is situated. 

The city is well known for its extensive history, rich cultural diversity, and notable impact on the arts, business, education, entertainment, fashion, finance, healthcare, media, professional services, research and development, tourism, and transportation. 

From EC (East Central) to WC (West Central) and from N (North) to SE (South East), respectively, are the central postcode districts in London. The city’s area code, 020, covers most of Greater London and some nearby areas.

The Tower of London, Kew Gardens, the location of the Palace of Westminster, Westminster Abbey, and St. Margaret’s Church, as well as the historic town of Greenwich, where the Royal Observatory, Greenwich establishes the Prime Meridian, 0° longitude, and GMT, are all World Heritage Sites in London. 

Common district names that describe the city’s vast urban area include Bloomsbury, Mayfair, Wembley, and Whitechapel. These slang terms are used to identify a general area of the town. 

London’s numerous parks and green areas, including the well-known Hyde Park and Royal Botanic Gardens, are another way the city stands out.

More than 300 languages are spoken within the city limits of London, home to a diverse population. The city’s cuisine, which offers a variety of dishes from around the world, perfectly captures this diversity.

Local Areas Where Equity Release Can Be Provided

Here is a list of local areas and boroughs where equity release services can be provided.

1) City of London

2) City of Westminster

3) Kensington and Chelsea

4) Hammersmith and Fulham

5) Wandsworth

6) Lambeth

7) Southwark

8) Tower Hamlets

9) Hackney

10) Islington

11) Camden

12) Brent

13) Ealing

14) Hounslow

15) Richmond

16) Kingston

17) Merton

18) Sutton

19) Croydon

20) Bromley

21) Lewisham

22) Greenwich

23) Bexley

24) Havering

25) Barking and Dagenham

26) Redbridge

27) Newham

28) Waltham Forest

29) Haringey

30) Enfield

31) Barnet

32) Harrow

33) Hillingdon

34) Watford

35) Slough

36) Woking

37) Guildford

38) High Wycombe

39) Maidenhead

40) Luton

41) St Albans

42) Hemel Hempstead

43) Harlow

44) Stevenage

45) Crawley.

Try Age Partnership’s equity release calculator and estimate how much money you could release from your property

Financial Promotions Sign-off

Where applicable, the adverts for Boon Brokers on this page have been signed off as a Financial Promotion by Boon Brokers Limited, to ensure that they are in compliance with Section 21 of FSMA. Boon Brokers Limited is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.

The Age Partnership equity release calculator has been approved and provided by Age Partnership. Age Partnership is a trading name of Age Partnership Limited, which is authorised and regulated by the Financial Conduct Authority. FCA registered number 425432.

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Meet the author

Jane Parkinson

Jane Parkinson

Jane is one of our primary content writers and specialises in elder care. She has a degree in English language and literature from Manchester University and has been writing and reviewing products for a number of years.

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