Flat Roofs a Major Barrier to Equity Release

Having a flat roof is the most likely reason to be rejected for Equity Release. An annual report on reasons for rejection from lender More2Life found that one-quarter of all rejected applications in 2020 were over concerns about flat roofing.

Equity release, sometimes called 'lifetime mortgage', is an arrangement that allows homeowners over the age of 65 years old to borrow against the value of their home.

Typically, borrowers don't make any repayments on their debt while they continue to live in their home. Instead, the debt is recouped from their home's sale after they die or move into long-term care.

Therefore, a building's structural integrity is important to lenders, as it has the potential to affect the long-term value of the home.

Because flat roofs are more susceptible to damage than pitched roofs, they may need to be replaced more frequently; a costly business that makes these homes less appealing investments for lenders.

Flat roofs were widely adopted in the UK after the Second World War. They were seen as a cheaper alternative to traditional pitched roofs, but whilst their capital cost can be lower, they can be prone to defects, The majority of flat roof problems relate to moisture, either from rainwater or condensation.

says the UK's Designing Buildings Wiki.

However, out of the thousands of equity release applications made in 2020, only 8% were rejected overall.

According to More2Life, the majority of rejections are over a small set of familiar concerns.

After having a flat roof, the most common reasons for equity release-rejection are:

• Being close to a commercial property.
• Having clutter around the home.
• Living in a flood-risk zone.

Other reasons for rejection include low property value, single-skinned walls, a property being ex-local authority, foam insulation and major structural issues.

This is nearly consistent with 2019's findings, apart from clutter- which jumped from the 6th most common reason for rejection in 2019 to the 3rd in 2020.

More2Life speculated that because the pandemic has eliminated one-to-one surveyor-client meetings, the importance of having a clutter-free home for valuation is not being clearly explained.

Dave Harris, CEO at More 2 Life, said:

It is vital that advisers know that properties with large flat roofs near commercial premises with foam insulation may struggle to be accepted so they can manage their clients' expectations. That said, with the pandemic restrictions and more advice than ever before being provided remotely, it has become far harder for advisers to pick up on details such as clutter or notice that something is not quite right with a structure.

Clutter around the home can prevent surveyors from getting an accurate picture of the property's underlying structure and thus retail value, says the lender.