Retired homeowners are increasingly using property wealth to clear unsecured debts and mortgages to strengthen their later life finances, a new equity release report claims.
The number of customers for the Key equity release firm using money from their homes to pay off credit cards and loans hit a three-year high of 35 per cent in the first quarter of this year.
In addition, 28 per cent used property wealth to clear outstanding mortgages compared with 21 per cent in 2018.
Key’s Q1 figures show new lending rose to £839.58m with a further £340.42m in new potential drawdown facilities also arranged.
It claims this takes the value of the equity release market in Q1 2019 to £1.18 billion up from £1.03 billion in the first quarter of 2018.
Customers released an average £75,032 during the three months.
“Typically the equity release market has a quieter start to the year but the latest Q1 results suggest that we should see continued growth in 2019” explains Key chief executive Will Hale.
“Nearing or entering retirement with an income that might be exceeded or matched by debt repayments can be hugely stressful and may mean people need to make fundamental changes to their plans such as working longer” he says.
“However, this will not solve everyone’s issues and is not even viable for some so looking into downsizing, equity release or other later life lending options might be the right answer.”
Key’s market snapshot shows the biggest increase in value released was in the West Midlands, followed by the East Midlands and North East.