Equity release reaches new highs we advise people to be sceptical

The popularity of equity release has been gathering pace for some time now, and this week it reached new highs when it was revealed that the sector had doubled in size in just over 36 months.

Figures show that in the last 14 months homeowners have released around £3.4billion from their property, with many people using the freed up cash to either renovate their home or help out family and friends.

On the face of it, equity release is a marvelous thing, especially for retirees who have thousands of pounds sat doing nothing in bricks and mortar, but we always advise our readers to be aware of the pitfalls..

Many people who have gone through the process of equity release will probably tell you that they have released thousands of pounds from their home and have spent the money travelling the world, or renovating their house so that they can have a more comfortable and fulfilling life, and whilst that is true, it is not the whole story.

The downside to equity release comes further down the line - mainly when it's time to sell the property. Many people have been stung with 'excess charges' with some conned out of thousands for things such as 'early redemption charges' and high interest.

It is also widely known that rates are considerably higher than what would be found on a standard mortgage. Don't get us wrong, equity release can, and has, worked for many people, it's all dependent on circumstances, but what people must do is research other avenues.

It's looking like as a society, especially the older generation, we have concluded that if we need to free up a considerable amount of money, then we must look into equity release, when in fact, there may be better options out there such as a standard mortgage or a loan. As with everything, research and a bit of shopping around can go a long way - and if a significant amount is at stake, it never hurts to get an adviser to look at your circumstances to make sure you're making the right choice.