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Move with the times

Any innovation in the equity-release market is to be welcomed. Prudential’s Property Value Release product seems to have all the right features and the rate – at 6.45 per cent – is there or thereabouts. Portman charges 6.15 per cent while Mortgage Express charges 6.64 per cent. Northern Rock has a fixed rate of 5.99 per cent.

The ability to draw down money gradually is welcome as you can access it when you need it rather than as a lump sum which has to be invested. Although Pru says this facility is unique, other providers offer it, including Northern Rock and MEX. Maybe Pru’s product is uniquely flexible compared with other providers but this is not clear.

The initial amount you can withdraw – 15 per cent – is at the lower end of the scale compared with other lenders. The norm is 20 per cent, with MEX offering up to 25 per cent at age 60.

If a client wants to take as much cash out of their estate as possible when they turn 60 for inheritance tax reasons, the Pru product might not be ideal as they are limited to 15 per cent.

It is good that the pro- duct is portable so that you can take it with you to other properties. This is allowed on other equity-release products but it is not straightforward and only allowed in certain circumstances. I would want to see more detail on this.

It is not a bad product but whether it is good enough to capture a big share of the market remains to be seen.

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