Equity release soars as pensioners unlock £71K from their homes
The property wealth released by new equity release customers in the third quarter of this year increased by 18% from the same period last year, to a total of £749 million.
The number of plans sold also grew strongly, climbing 26% to 10,477 in Quarter 3, said Key Retirement.
The over-55s finance specialist found that retired homeowners typically released £71,500 of property wealth from houses worth £325,000.
In London pensioners unlocked an average £133,000 from houses typically worth £655,000 while in the South East of England the average house price was more than £400,000 with pensioners releasing more than £84,000.
Sales of equity release plans increased in every region of the UK, with Wales seeing growth of 51% year-on-year and East Anglia an increase of 46%.
Dean Mirfin, chief product officer at Key Retirement, said: “The new record for the third quarter means sales for the first nine months of the year have already nearly matched the total for all of 2016.
“Increased competition and rate cuts across the equity release market are enabling customers to dramatically improve their quality of life in retirement and address a wide range of financial issues.”
How to spend it
More than one in five (22%) customers used property wealth to pay off outstanding mortgage debt, while 30% used the cash to clear debts and 36% used it to go on holiday.
Over a quarter (26%) used the money to help family and friends up from 19% in Q3 2016.
However, the most common reason for releasing cash was to get their home retirement ready. Almost two thirds (64%) used the wealth for home and garden improvements.