More people than ever released equity from their homes last year
A record 82,791 customers unlocked equity from their homes during 2018, according to trade body the Equity Release Council.
Many of those homeowners were drawing down funds on existing plans, but 46,397 were new equity release borrowers – a 25% year-on-year increase, and double the number taken out three years ago.
Consumers are increasingly looking to unlock wealth built up in property to support their finances beyond the age of 55.
The total amount lent in 2018 grew for a seventh consecutive year to reach £3.94bn, up 29% year-on-year, with £1.08bn of housing wealth unlocked in the final three months of the year – another record for the sector.
Greater choice of products
Growth in the popularity of equity release products has been boosted by a wider range of products to choose from (139 compared to 58 two years ago), and flexible product features, such as the option to pay interest each month and make capital repayments without penalty.
David Burrowes, chairman of the Equity Release Council, said: “The equity release market continues to experience sustained growth as it proves a vital tool for consumers looking to make the most of their financial resources in later life. Older homeowners are realising in growing numbers that property wealth can play a crucial role in supporting their retirement alongside pensions, savings and other assets.
“With a growing choice of products and features on offer, the market is maturing and adapting to offer a new level of flexibility to suit a range of financial needs and ambitions – from funding care costs to helping children to buy their first home. Equity release now plays a pivotal social role and the Equity Release Council will continue to ensure that products are underpinned by robust consumer safeguards.”