Equity release sector hit by lockdown
The value of equity release sales fell by 45% from the first to the second quarter of 2020, from £949m to £521m, according to Key’s latest Equity Release Market Monitor.
In total, older homeowners released £1.47bn of property wealth in the first half of 2020, with the coronavirus pandemic hitting sales as cautious customers cut back.
Fall in borrower numbers
The number of plans sold also fell by 27% over the same period, said the equity release business, falling from 11,495 in quarter one to 8,374 in quarter two.
Will Hale, CEO at Key, said: “The unprecedented circumstances the UK and the world finds itself in due to the coronavirus has been reflected in the significant slowdown in the equity release market in the second quarter.
“Whilst the sector has been remarkably resilient in adjusting working practices in the face of lockdown to ensure we can continue to help customers, there are a number of knock on effects from the current pandemic.
“Indeed, not only are cases taking longer to complete but it is only appropriate that people are delaying their decision to access their housing equity due to the current uncertainty.”
Claire Singleton, CEO of Legal & General Home Finance, added: “A dip in demand is to be expected in these circumstances. Homeowners should always think carefully before taking out a lifetime mortgage and, for many, the decision to pause and take time to consider their options will have been the right one.
“When the economic picture becomes clearer, we think demand will return.”