Lifetime mortgage lending up 8% in last three months
Nearly £11 million of equity was unlocked by homeowners over 55 every single day from July to September, said the Equity Release Council.
The trade body for lifetime mortgage providers said total borrowing in the third quarter of the year was £988m, up 8% on quarter two and the busiest period of the year to date.
So far this year, over 33,000 new customers have chosen to access their property wealth using equity release. This exceeds the total number of new plans agreed in any year since 1991, when consumer safeguards and industry standards were introduced.
What is the money used for?
The money unlocked is used for a wide range of purposes, said the Equity Release Council, including supplementing pension incomes, providing a ‘living inheritance’ to family, making home improvements or age-related adaptations, and paying off debt.
David Burrowes, chairman of the Equity Release Council, said: “As a nation with an ageing population and a growing need to support longer lives, it is important not to overlook property wealth in modern retirement planning conversations. Today’s equity release market is offering new solutions to fund later life, by combining rigorous consumer protections with more product choices and flexibility to help people meet their financial needs and goals.
“The result of buying property and making mortgage payments during their working lives is that bricks and mortar become many people’s single biggest financial asset when they reach later life. Industry, regulators and government must continue to promote and encourage lifelong savings habits, while also recognising that retirement financial plans are best made by taking all assets into account.”
Official demographic projections show that the number of people aged 55+ will increase by nearly 5m or 23% over the next 20 years to make up more than a third of the UK population.