The top reason why a customer opts for a home reversion plan is to repay a mortgage, according to Bridgewater Equity Release.
The results for Bridgewater’s total home reversion sales and further advances throughout 2010 show the vast majority of customers are using the cash released from their home to either repay a mortgage, carry out home improvements or to consolidate other debts.
The top five uses for the released cash were: repay mortgage (43%) home improvements (31%) consolidate other debts (27%) travelling (19%) and buying/repairing a car (12%).
Customers’ were able to detail more than one intention for the cash they released from their home.
All of the top three reasons chosen by customers increased in popularity from 2009’s results repaying a mortgage up from 30% home improvements up from 17% and other debt consolidation up from 15%.
Other uses for the money cited by Bridgewater customers included a combination of home improvements and debt consolidation (7%), to provide a gift such as funding a house deposit or wedding (7%), to fund a separation or divorce settlement (4%), to use as a savings or safety fund (4%), and improving or maintaining a lifestyle (4%).
The popularity of customers using their money to fund any long-term care needs remained low, with only 1% choosing this option. Also, no customers were intending to use equity release as part of their IHT planning.
Bridgewater believes however that, as state support falls due to the Tory-led government’s spending cuts, more customers will be using the equity in their homes to either maintain their existing lifestyle and/or fund their long-term care needs.
Peter Welch , head of sales and distribution at Bridgewater Equity Release, said: “The three main uses for releasing equity through Bridgewater’s home reversion plans have remained the same over the past few years
