Knight Frank Finance has launched a later life finance team, making it the first major player in the property sector to offer this service to those over 55.
The newly formed team, which is part of global real estate group Knight Frank, will offer a suite of products designed for older homeowners, including equity release and retirement interest only (RIO) mortgages.
With equity release becoming an increasingly popular way of accessing wealth for the over-55s, the mortgage market has evolved to meet the needs of those who are planning for later life and retirement.
David Forsdyke of Knight Frank Finance commented: “The market for equity release is growing quickly. Over-55s currently hold the majority of all property wealth in the UK at 75%.”
“We are seeing older people look to release equity from their primary residence for a number of reasons, including helping children financially, making home improvements and enhancing their quality of living, or to take the holiday of a lifetime.”
He added: “At the same time, we have seen a steady decline in pensions and savings, with retired people in the UK often finding themselves asset rich, but cash poor.”
What’s more, the Bank of Mum and Dad – or the Bank of Grandma and Grandad – has played a significant part in fuelling the growth in equity release, as parents look to gift their children and grandchildren a sum of money to help them purchase their first home.
With this in mind, Knight Frank Finance also aims to provide advice for those who need a short-term solution to help downsize or buy a retirement home.
According to the new team, the number of people aged over 65 living in the UK is forecast to increase by 20% to 14.4 million by 2027.
With advancements in healthcare, individuals are living longer lives and managing health conditions better. Indeed, the demographic of 90-plus-year-olds is expected to rise by a third to more than 750,000 people over the same time.
Because of this, the need to provide suitable financial and housing options for these individuals is more important to grow.
Knight Frank’s calculations suggest a need for retirement living properties for 3.6 million people to house those aged over 65 that would consider downsizing.
This is based on the assumption that 25% of over-65s in their existing homes would consider downsizing into some form of specialist retirement living.