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Bad news for transactions as Equity Release grows again

New figures from the Equity Release Council suggest more growth in this sector, alarming those agents who see this as a threat to downsizing and therefore leading to a reduction in transactions.

Data released this morning shows that between July and December 2018, some 43,879 over-55 owners accessed money from the value of their homes, including 24,907 new plans agreed.

Total annual lending activity grew for a seventh consecutive year to reach £3.94 billion in 2018, although the average amounts of property wealth withdrawn remained broadly stable – indicating that growth is a result of broader uptake rather than increasing loan sizes.


The council claims that its analysis suggests consumer demand for equity release is rising across the UK, with double-digit growth in the uptake of lifetime mortgages.

Over the last five years London and southern regions - where housing values have traditional been highest – have seen the largest growth in equity release: East of England up 158 per cent, the South East up 143 per cent and the South West rising 99 per cent.

More recently, the Midlands and Northern Ireland have come to the fore, with the East Midlands (26 per cent up), West Midlands (20 per cent) and Northern Ireland (21 per cent) seeing some of the greatest increase in demand for lifetime mortgages between 2016/17 and 2017/18.

The council says product innovation continues to broaden the appeal of equity release, with there now being 221 product options - double the number of just a year ago.

 The council also claims there are more “prudent measures”in place by lenders to keep consumers’ withdrawals of housing wealth in proportion to their age and potential longevity.

“2018 saw equity release enter the mainstream of financial services as an increasingly popular way to meet important and diverse social needs in later life. Flexible options to access housing wealth are helping the nation’s growing population of older homeowners to fund lifestyle purchases, satisfy daily needs, support long-term financial planning or assist their families” claims David Burrowes, chairman of the Equity Release Council.

“As the demand for equity release grows, so does the need for quality advice. It is vital that consumers have access to professional support that considers short and long-term needs, the broader retirement picture and the role of family in decision-making. Equity release is not a ‘silver bullet’ for every retirement need, but a growing number of homeowners are finding it can be a solution to meet a range of financial goals.”

  • Richard Copus

    The growth of equity release is not necessarily bad news for transactions. A large number of equity releasers are using the system to pay off their interest only mortgages, therefore negating the "time bomb" that The Times wrote about in their front page headlines a few years back. Also, new competition in the market has meant that some equity releases are little more than interest only mortages for "mature" people which you can pay back when you want and if you want and use to port over to a replacement property on the payment of a valuation fee and reasonable admin fee only, making it easier and cheaper for some of these people to move than those with conventional mortgages tied around their necks. With fixed interest rates at 4.5% or less in some cases, it is hardly surprising that equity release is becoming more popular, but there are rogues out their selling the worst deals to unsuspecting pensioners - the next front page news perhaps?

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    • 03 April 2019 11:08 AM

    Now what would I do as a pensioner in a large rambling house when really I would like to be renting in sunny Spain or the Algarve?
    Equity release! ?
    Nope that would be be plain stupid.
    How about 4 lodgers at £600 each
    No tax paid cos the lodger rent will never exceed the £7500 RFR A.
    Say £400 in costs leaving £2000 never to be taxed profit
    No S24
    No Mandatory HMO licensing.
    Fly home once per month by Ryanair to check on things and collect mail
    Beats equity release I think! !


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