Equity release to do up an old wreck

PENSIONERS stuck in a dilapidated house they cannot afford to fix are being offered a new kind of loan by savings firm Legal & General.

L&G has launched a lifetime mortgage for older homeowners to borrow cash against the value of their property to refurbish it. The money will be paid back after the owner has died, with interest, using proceeds from the sale of the house.

Bosses have tested the scheme in cities such as London, Oxford and Birmingham, working with charities to identify vulnerable people who need the money urgently to stay in their own home.

The company’s lifetime mortgage department, which sells loans to a wide range of customers looking to free equity in their properties, did £500m of business in the first six months of 2018, up 23pc on a year earlier.

Chief executive Nigel Wilson said as much as £1.5trillion of wealth is locked up in older people’s houses, and this could be spent elsewhere.

He said around 1m retired couples have no children, and saving their property for inheritors will matter less to them.

L&G saw half-year profits slip 19pc to £942m compared with the same period in 2017, but raised the interim dividend by 7pc to 4.6p a share.