The first capital release plans for older consumers were launched in 1965. The UK capital liberation market originated in the late 1970s, with commodities largely provided by construction companies. At the time of the credit crisis, the market had introduced a number of key improvements, including the Non-Negative Capital Guarantee (NNEG), was largely self-regulating and had expanded to include insurance companies and companies specializing in retirement financial services. However, the financial crisis caused many suppliers to leave the market following funding difficulties, leaving it up to a few insurers and players specializing in the liberation of capital that offered a limited product range and stubbornly high interest rates. The stock launch market has increased dramatically in size in recent times, and there is little sign of this going down.
Some predict growth of another 50 percent in the next two years. Part of the strategy on this front is a conscious choice not to present a capital release option as the only way forward in terms of retirement funding, he explains. Previous barriers for equity release products to take off and help these retirees leverage their assets as a source of retirement income have been largely shattered. That is why the current relatively small share release market in the UK, which Datamonitor estimates to be worth £750 million, and according to the Mortgage Lenders Council, is considered to be worth approximately £1 billion, has the potential to support a sales growth of up to £4 billion or £5 billion a year for the next decade to achieve a market of £50 billion or, some would say, even £100 billion.
The UK stock launch market has expanded rapidly, reaching heights that would have been inconceivable just five years ago. For the future, the FSA proposes that firms that sell both mortgage-based capital release plans and reversal plans should be required to consider both types of products when advising. If you are considering hiring a capital launch product, you should seek financial advice from an independent financial advisor. Although the UK share issuance market is large and booming, it is eclipsed by its US cousin, the reverse mortgage market, which is roughly five times its size.
It remains to be seen how big the stock launch market can become, although fundamental demographic and economic conditions seem to support the theory that it can only continue to inflate, not least because its small size means that it has plenty of room to grow. For many people, freeing up capital may be the only way to increase their retirement income, whether it's to fund a lifestyle need, care fees for a loved one, or policies for one's future home care. A greater demand for capital release may arise from those over 55 who are looking for solutions to pay off the outstanding balance on their mortgages only with interest that matures. This includes advisors, suppliers and lawyers, along with affiliates and associates participating in the stock release market.
As with any growing sector of the mortgage market, many experts think that freeing up capital offers a good opportunity for brokers to expand their business. Below we describe some of the advantages and disadvantages of both types of capital release, but you should seek further advice. .
