There are many equity release plans now on offer for older people who wish to access some of the equity in their home without selling up and downsizing.

The equity that your home holds can be calculated by taking its current value and deducting the debts (like a mortgage) that are still owing on it. An equity release plan will free up this cash value, so that you can spend the money as you choose. However, before you go ahead, you should understand this is a lifetime commitment.

Equity release tends to be used for less essential spending – allowing for a few more of life’s luxuries during the retirement years. Here are a few examples of what money released through an equity release plan can be spent on:

Splashes of luxury – equity release can free you to buy a new car, or book a holiday in foreign climes, while keeping up your normal standard of living.

Health care – unfortunately, many people fall ill during retirement and get big treatment bills that need paying. Equity release plans can be put to use in this instance.

Gifts to your family – equity release is sometimes used to help put a grandchild through university or buy their first property.

Additional income – some people use equity release to top up their pension so that they can continue living in the same way that they used to when they were earning.

Home improvement – a lot of time is spent at home during retirement, and many people use equity release to improve their home by adding a conservatory or upgrading the kitchen or bathroom, making it a more comfortable place to spend time.

If you want to find out about cheap equity release at Age Partnership, you can check out the different forms of equity release on the agepartnership.co.uk website.

Age Partnership does not provide equity release plans itself, it is an independent company that searches the entire spectrum of equity release plan providers to find you the best and most appropriate deal.

Renting out a home can be profitable, and there are reasons why this can particularly be the case in the current market. Some of these are outlined below.

House Prices and Interest Rates

House prices have come down and are lower than they were four or five years ago during the housing boom. This makes buy-to-let more attractive. Interest rates are also favourable, so not only is a home cheaper to buy initially, but borrowing the money to do so will also cost less. The current interest rate has led to lower mortgages, and while this will not last forever it will be favourable in the short term. Beginning a tracker mortgage will cost less to begin with but it will also help those seeking a fixed mortgage, meaning more of a long-term benefit. So, in theory, there are cost benefits to buying a home now with lower house prices and lower interest rates, and this benefits those looking to buy for the purpose of renting.

Demand for Rental Properties

Due to long-term rises in house prices and mortgages difficult to come by, it means there is high demand in the rental market. Significantly higher numbers are looking to rent and the percentage of those owning their own home has dropped. Rising demand means those looking to rent out properties can be confident of finding tenants, therefore reducing the risk of being left with an empty home. Due to this demand, rental prices in some areas of the country have increased, meaning being able to charge more in rent and make a higher profit.

Prices will Eventually Rise

It is very likely that house prices will eventually increase again. Therefore, those buying now are likely to be able to sell their property for more in the future. Buying a home now, renting it out, and then selling in a few years time is a good way of taking advantage of this.

Renting your Current Home

Due to the relatively stagnant housing market at the moment, those looking to move may be better off renting out their current home rather than selling it. Asking prices are not so high, inevitably meaning receiving less in a sale. If affordable it might, therefore, be wise to rent out your existing home while buying a new home, with the rent coming in replacing the mortgage being paid on your current home. This will allow you to still move but be able to see out the dip and sell your existing home for more further down the line.

In the current housing market there is more demand for rental properties. And with house prices lower and lower mortgage rates available it means renting out a home can be particularly profitable.

If looking to buy-to-let it is important to thoroughly research the area you are considering. There are some areas where there is more demand for rental properties than others. This, of course, increases the likelihood of being able to find tenants as well as increasing the rental price. Average rental prices per area do not always coincide with house prices. It is, therefore, possible to find properties that are cheaper to buy but where more can be charged in rent.

Andrew Marshall ©

Andrew Marshall is working on behalf of Winchester White, a letting agency who specialise in Flats to Rent in Wimbledon.