Who will release our equity?
ANECDOTAL evidence gives the States and the financial services regulator a strong steer – yes, there is significant pent-up demand for equity release in Guernsey, especially when the housing market makes it so difficult for older islanders to downsize.
But an industry expert says it won’t happen here because the specialist lenders needed would consider that the market is too small.
And any private lender is likely to be put off by the prospect of regulation which the GFSC is looking to introduce.
It’s now more than five years ago that the States agreed the concept of equity release – allowing homeowners later in life to release some of the value tied up in their home, to be repaid when they die or move into long-term care.
And it’s pertinent to be raised again now when paying for long-term care is back on the agenda, and the prospect of equity being used will have to be considered.
The consultation exercise should be illuminating.
It should not be impossible to offer equity release in an island which prides itself on developing financial structures and products, and the GFSC wants to see an equity release scheme go live in 12 months’ time.
But if the market isn’t playing along, then maybe it’s a largely risk-free prospect for government to step in and provide the long-term backing required for such lending?