Older home owners have unrealistic expectations about how much money they will raise from downsizing due to a lack suitable homes, a poll of estate agents has found.
A survey of 104 agents by equity release provider Key Partnerships found that 66% have reported a rise in enquiries from vendors wanting to downsize to raise cash.
But 72% of estate agents say older home owners have unrealistic expectations about the money they can make.
The main reason cited is a lack of suitable homes for downsizers which is forcing up prices.
Instead, 42% of estate agents regularly recommend equity release, which lets a home owner release cash in their property without needing to move.
Will Hale, director at Key Partnerships, said: “Estate agents are increasingly recognising that equity release is a real alternative which enables home owners to stay in their home and raise cash, but it should be part of all conversations with older home owners considering downsizing, when for many the maths simply doesn’t add up.
“Whilst as an estate agent selling houses is the major revenue driver, where the economics don’t work from downsizing, clients will simply withdraw their properties from sale.
“Estate agents who increasingly discuss equity release as a potential alternative are able to benefit from an additional revenue stream by referring potential clients to a specialist.”
There are of course tax implications and repayments to consider, so an agent would need to suggest not only talking to an equity release adviser, as they are not qualified to provide advice.
Some may have referral arrangements which allow them to take a commission on recommendations.
In return for referrals, intermediaries such as estate agents can earn on average £1,450 on completion of the loan, Key Partnerships says.
I can see that conversation. “No Madam we don’t wish to list your home thank you”. “We feel increasing your debt is the way forward”
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register