Can equity release loans help agents save the day in a sluggish market?

Nearly half of all estate agent have seen an increase in the number of vendors forced into a sale to pay off interest-only loans over the past two years, an equity release firm has claimed. Based on its analysis of Council of Mortgage Lenders data, equity release firm Key Partnerships says the number of interest-only mortgages has decreased by a third since 2012, a trend created by the number of home owners looking to clear their outstanding mortgage debt via ‘forced sales’. But if agents can’t sell these homes in today’s sluggish sales market, Key Partnerships says agents should consider offering them finance packages that enable them to stay put rather than lose the sale to another agent. Forced sales These ‘forced sale’ vendors are the borrowers who took out interest-only loans 20-plus years ago but whose investment strategies have failed them or who never bothered to set up funds to pay off the mortgage debt when they stopped working. Key Partnerships says another 10,000 such sales are due to take place over the next three years and that most will be by older customers as they try to pay off their outstanding interest-only mortgages. Three quarters of those downsizing…

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