Equity release deal numbers reach close to 700
Equity release borrowers now have close to 700 deals to chose from when making a decision to withdraw their property wealth, rising from 88 five years ago.
Moneyfacts’ analysis of equity release product numbers revealed a 45 per cent rise in deals from 480 in January to 698 in August. Product numbers have risen drastically over the last five years, by almost 700 per cent.
Loan to value (LTV) caps have risen too. In August 2016, the average maximum LTV was 49 per cent in the years that followed, higher LTVs fell out of favour and the average fell to 46 per cent in April 2019. However, Moneyfacts’ report shows the average LTV cap has now recovered to 50 per cent.
While rates are much lower now than they were five years ago, 5.76 per cent compared to 4.32 per cent, August rates are higher than their average price point of 4.13 per cent in August 2020.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “The equity release market has remained resilient during 2021 and, in fact, business is booming and is expected to grow in the years to come. Advisers remain optimistic in the sector and lenders have made it clear that they are prepared to compete and tailor their ranges to suit borrower demand.
“In the next decade, the amount of equity released per year is predicted to grow from £3.7bn in 2021 to £6.4bn according to More2Life.”
Springall said that although rates have risen year-on-year this is not surprising given that the average LTV has increased, introducing more higher-priced deals into the market.