Equity release booms as £1bn released in the third quarter of this year
Equity release lending bust the £1bn mark in the third quarter of 2018 – the first time it has reached the milestone in any quarterly period.
The total was up £195m (24%) since the same time last year, from £824m, as the market and product range continue to grow to satisfy wider consumer demand.
Older homeowners are releasing the equivalent of £11m every day from their homes, according to the Equity Release Council.
The milestone comes just weeks after the Government recommended that equity release should feature among the home finance options that will be signposted to older people by the new Single Financial Guidance Body, to help support a more rounded approach to later life financial planning.
Huge number of plans agreed
An unprecedented 12,016 new equity release plans were agreed from July to September 2018, equating to 6% more new customers than in Q2 2018, and nearly double the amount seen in the same period three years ago (6,049 in Q3 2015).
The average amount of property wealth unlocked by new customers has remained broadly consistent, showing people are withdrawing equity in modest amounts. The average new lump sum lifetime mortgage plan was 5% lower than in Q2 2018, decreasing from £95,991 to £91,398.
David Burrowes, chairman of the Equity Release Council, said: “The equity release market is making an increasingly important contribution to the later life landscape on an individual, social and economic level.
“Older homeowners are discovering in growing numbers that property wealth can play a key role in funding a myriad of needs, from making home improvements and adaptations to paying for social care and giving financial help to younger family.
“As the range of later life products continues to grow, it is vital we encourage customers to consider all
available options, and ensure they can access appropriate guidance and specialist advice to weigh up
the benefits, costs, flexibilities and protections to best meet their current and future needs.”