Equity release numbers down

The number of equity release plans taken out in the first three months of the year fell by 7%.

However, thanks to falling property prices, the value of the equity release market fell by 24% over that period.

According to data from Key Retirement Solutions (KRS) the value of those homes being used for equity release fell by 16% in the first quarter of the year.

The Key Retirement Solutions Market Monitor shows that £183 million worth of value was unlocked from property via equity release plans from January to March this year, a significant fall on the £240 million released over the same period last year.

The decrease, which is the largest fall since KRS started compiling data in 1999 – is mainly down to plummeting property prices, with the average equity release property now worth £193,335, down from £234,931 a year ago.

As a result, KRS has reported a 15.33% fall in the average proportion of value released from each property with equity release, down to £44,948 from and average of £53,084 in the same quarter the previous year.

Dean Mirfin, group director of Key Retirement Solutions equity release, said: "Whilst the total number of plans fell by just over 7% the dramatic fall in lending figures is impacted most by the fall in property values."

He noted that the fall in the number of equity release plans being taken out was due to homeowners waiting for property values to pick up, but urged people to make the most of the value locked up in their homes now.

"Those considering equity release may be waiting for property prices to improve, but this could well prove to be a false economy," he said. "We only get one chance at retirement and it is important that those considering equity release do not delay, time is something we can't buy back."