There’s been more growth in the equity release sector, suggesting that fewer older owners are downsizing and are instead using their existing homes to release money for later life.
The Equity Release Council says 46,397 new equity release packages were agreed in 2018.
Total lending activity for 2018 grew for a seventh consecutive year to reach £3.94 billion, up 29 per cent year-on-year, with £1.08 billion lent in the final three months alone. This was the most activity seen to date on either a quarterly or annual basis, says the council.
The 46,397 new plans in 2018 were more than double the 22,749 seen three years ago in 2015.
The council claims growth in the popularity of equity release products has been fuelled by a wide range of new product features and flexibilities appearing on the market.
As of August 2018, 139 product options were available to consumers - that’s more than double the 58 seen two years ago in 2016 and up from 24 in 2007.
New options include the ability to receive regular monthly income from housing wealth to boost other sources of retirement funds, such as the state pension and private pension savings; options to pay interest each month rather than rolling up interest; and other options to make voluntary capital repayments free from early repayment charges.
“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” says David Burrowes, chairman of the Equity Release Council.
“Industry, regulators and government must continue to explore how we can help generations of retirees, both today and in the future, to adopt a more rounded approach to later life planning.
“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.”