Rush expected to unlock homes cash

PENSIONERS are being put off tapping into their estimated £459bn pool of home property wealth by the 'torrid past' of equity release financial products, a report says today.

Last year only £750m of capital was drawn from the vast bank of wealth locked into the bricks and mortar owned by Britain's over-65s.

However, the report, from business information provider Datamonitor, predicts an equity release boom to top up retirement incomes because of the low level of the State pension and the decline of generous final-salary occupational schemes.

The main deterrent will be the 'horror stories' of the rip-off schemes of the 1980s and the fact that they still do not offer good value for money. Cash raised through a release of property equity is typically charged interest at between 7% and 8% compared with 4% to 5% on standard mortgages.

Datamonitor's Edward Ripley said: 'As equity release schemes become more popular, lenders risk losing customers if they are unable at least to offer some form of retiree mortgage.'