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Remote equity release process temporarily approved by key industry body

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Equity release has long been a popular option for those looking to unlock some of the value of their home later in life. With the current covid-19 pandemic affecting a lot of people’s financial circumstances, it is understandable that many homeowners are currently looking closely at this option.

In some welcome news, leading consumer trade body the Equity Release Council (ERC) has announced a temporary modification to their standards to make it easier for homeowners, equity release providers and law firms to deal with equity release remotely.

In a statement released by the ERC, the council’s Chairman David Burrowes explained that this would involve: “a temporary modification of the face-to-face legal aspect of our standards, given the need to observe proper social distancing during the covid-19 pandemic.”.

The new guidelines set out by the Equity Release Council include:

  • A remote process using telephone or video facilities
  • Additional steps to ensure customers are given the legal advice they need when considering equity release
  • Advice on how the physical witnessing of the mortgage deed (required under UK law for equity release) can be carried out by an independent witness under social distancing rules
  • How solicitors assisting customers with equity release can conduct due diligence to ensure the witnessing of the mortgage deed is valid.

Mr Burrowes stressed that the ERC and its members “reaffirmed a unanimous commitment to the ‘gold standard’ of face-to-face legal advice” while adding “it has been recognised that there is a need for a pragmatic, flexible and time-limited alternative during this unprecedented period of national lockdown.”.

He also made clear that, in taking this decision, the ERC has been “guided by advice from our solicitor members to ensure the protection of consumers is paramount” and that “face-to-face legal advice remains enshrined in the Council’s Standards and remains an option if and when Government guidance allows.”.

Mr Burrowes said that the modification to the ERC’s standards would remain in place for the next 12 weeks, at which point the Council’s Standards’ Board would review the situation.

What does this mean for anyone wanting to release equity from their home during lockdown?

If you were considering equity release before the covid-19 lockdown or wish to look into this option as a result of your current financial circumstances, the new ERC guidelines mean you may still potentially be able to release equity from your home.

The majority of the process will be able to be carried out remotely, by email, phone and/or video conferencing, but you will still need to have the mortgage deeds physically witnessed by someone.

The person witnessing the mortgage deed needs to be over 18 and “independent” i.e. not a relative, party to the mortgage or someone who lives at the property in question. Obviously, this is more problematic than normal at the moment given the current social distancing rules, so who can be a witness and how to arrange this is something you will need to consider carefully.

It is also important to make sure any equity release deal you enter into is fair and represents a good deal long-term, and that you do not rush into anything that will negatively affect you in the future just to access funds you need right now. It is therefore essential to have an expert equity release solicitor review the terms of any deal before making a decision.

How Bird & Co can help you with remote equity release for your home

If you are thinking about equity release for your home, our expert equity release solicitors can provide clear, practical advice via email, phone and videochat.

As a firm, we have been offering online conveyancing for our clients for many years as we know how simple and convenient this option can be. We are therefore well placed to provide a safe, efficient online equity release service for clients anywhere in England or Wales

We will be happy to explain how the process works and what you need to do, including the requirements for having the mortgage deed witnessed and how this can be carried out while maintaining proper social distancing.

We can also carry out all of the standard processes involved in releasing equity from your home, including:

  • Reviewing the terms of any lifetime mortgage or home reversion plan you have been offered
  • Carrying out equity release conveyancing checks
  • Updating your titles deeds with the Land Registry

To get in touch with our equity release solicitors, please give us a call or you can fill in our online enquiry form and we will get back to you promptly.