The average age of the UK is increasing. In 2008 the average age was 39, up from 37 in 98. While this doesn’t look like a big increase, it represents a large increase in the age to which people are living to, compared to the 70’s people are living around 10 years longer. So what does this mean for the property markets?

Although each person is different, the behaviour of both house buying and selling and its associated processes is changing. One of the key processes is that of the elderly and their ability to keep up with home payments, usually the gap between retirement and death is about 10-15 years and most people plan as such, however as a people live longer a gap is appearing in peoples finances and some uncertainty is being faced as to how to tackle this problem.

One of the main assets many elderly people is their home. A house represents a massive amount of equity that can be tapped by selling or renting it out. However for those who still wish to live in their houses this isn’t an option.

One of the solutions that people are turning to is equity release or reverse mortgages.

Essentially these solutions are policies wherein equity rich (but cash poor) people decide to either completely sell or partly release the value locked up in their property meaning they can stay in their home till the end of their lives, being able to sustain themselves more comfortably, or alternatively making arrangements for the home to pay for nursing homes or care should they need it, indeed more and more are turning to this option; the equity release market is currently booming, growing at an average of 13% per annum according the department of national statistics.

While for many this is a great solution, it is not for everyone. One must think about the term of the required cash. If it is long term, such as a nursing home then this is a good idea, however for quick cash releases it may not be fiscally sound thinking as the premiums and charges on this kind of plan can be steep. It is also worth checking the specifics of some contracts, make sure they are government approved as they may have small print that may not be to your liking.