15 March 2024

What is the equity release council and why does it matter?

Richard Brown Senior Associate
Older couple looking at paperwork

The equity release sector is safeguarded the Equity Release Council (the Council), which aims to protect consumers by promoting high standards of conduct. 

Wilkin Chapman is a proud member of the Council and strongly supports its standards and values, as it brings the sector together and strengthens its voice.  All customers who take out equity release receive independent legal advice to ensure they fully understand their choices and Wilkin Chapman has significant experience in providing this type of support.

To fully understand why the Council is so important, we should first explain equity release and how the Council works to educate the public about the potential to access housing equity.

Financial support for over 55s

Equity release allows over 55s to access equity tied up in their homes and receive a cash lump sum or regular payments, without having to make any monthly repayments.

There are two types of equity release - Lifetime Mortgages and Home Reversion plans. 

Lifetime Mortgage

A Lifetime Mortgage involves taking out a type of mortgage (essentially borrowing against the value of a house) where the money doesn’t need to be paid back to the lender until the property is sold, either when the owner goes into care or dies.

Clients can either choose to make ad hoc repayments (depending on lenders criteria) or allow the interest to roll up over the life of the loan.  What’s more, for couples taking out a Lifetime Mortgage, the full repayment is not made until the last remaining person in the home either goes into care or dies - leaving the home free to be lived in by its owners. 

Home Reversion

A Home Reversion plan is slightly different in that the provider will purchase all or part of a house, taking into account the owner’s age and health, and provide the owner with a tax-free lump sum or regular payments. They will also provide a lifetime lease, giving the owner the right to continue living in their home rent-free for the rest of their life. 

In recent years, Lifetime Mortgage equity release schemes have grown in popularity as people look to unlock the money that has built up in their homes. Because of this, the Council’s work to dispel myths about equity release and promote the consumer safeguards at its heart, has never been more important.  

Why choose equity release?

There are many reasons why over 55s choose to release equity from their homes - this could be to enjoy a dream holiday, fund a child’s university fees or make improvements to a home in order to make it more accessible. 

It can also be used as a form of financial planning for the next generation. By taking money out of an estate early, some people are able to pay off their mortgage, boost their retirement income and prevent their children from facing significant inheritance tax bills when they die. This can often be the case for people who purchased their home many years ago and it has since increased in value. 

Some people also use equity release as a way of funding care in later life - which can be a significant cost. Rather than using personal savings to fund care in the home, people can opt for equity release to help provide a withdrawal sufficient enough to cover care costs. 

Working with the Council

As a member of the Council, Wilkin Chapman is committed to providing expert advice in line with their principles. 

The overarching principles require us to: 

  • Ensure our actions promote public confidence in equity release 

  • Act at all times in utmost good faith, with the best interests of our customers, by treating customers fairly in all our actions

  • Ensure conflicts of interest are identified swiftly and managed fairly 

  • Seek to deliver suitable outcomes for our customers from initial sale through every point of contact during the life of the product 

Jim Boyd, CEO of the Equity Release Council, commented:

“Face to face independent legal advice is an integral part of the equity release advice process. It provides customers and their families with the added reassurance that the final choice that is made is right for the older homeowner. At the Council, we are delighted to work with well-regarded firms like Wilkin Chapman to help build a sector where high standards of conduct are expected and valued.”  

When chosen to provide equity release legal advice and services, our customers are invited to attend a face-to-face meeting, where advice is given to provide comfort and assurance that they are making an informed decision prior to proceeding. 

Speak to our team!

We have equity release experts in our conveyancing team across East Yorkshire and Lincolnshire: 

- Richard Brown: Louth 

- Claire Parker Robson: Louth 

- Jo Sworder: Lincoln 

- Caroline Fletcher-Shaw: Beverley and Grimsby

If you’re interested in equity release and need our support, why not contact one of our experts? 

Fun illustration
Richard Brown, Wilkin Chapman LLP
Need help?

Contact Richard to discuss this further.

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