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grew for a seventh consecutive year to reach £3.94 billion in 2018, although the average amounts of property wealth withdrawn remained broadly stable – indicating that growth is a result of broader uptake rather than increasing loan sizes.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