There’s more ammunition today for those agents who argue that equity release stops people moving and thus cuts the number of downsizers freeing homes for others in the property chain.
New figures from finance company Canada Life show that clearing an existing mortgage is the most popular reason for taking out equity release - 44 per cent of respondents to a survey by the firm gave that principal reason.
The second most popular use of equity release is homeowners making improvements to their properties “to generate more value and enjoyment” (40 per cent).
In addition, the study finds that more customers are using their property wealth to build up their emergency fund, with eight per cent of lifetime mortgages ring-fencing some of the money released for this purpose. However, more than one in five customers - 22 per cent - are using equity release to pay for holidays.
Some agents have in the past called for equity release to have some form of tax or duty attached to it, just as stamp duty would have been attached to a downsize house move in many cases. Their argument has been that a failure to move has effectively limited the housing stock of larger properties which might have been freed up through downsizing.
“While a large proportion of customers are looking to safeguard their financial future by paying down debts and increasing the value of their home, others are using equity release to improve their lifestyles, paying for home improvements and enhancing their quality of life now” says Alice Watson, head of marketing and communications at Canada Life Home Finance.
“The industry shouldn’t lose sight of the significant numbers of customers who are unlocking their property value to improve their way of life. It has enabled people to enjoy trips of a lifetime and make lifestyle enhancements that wouldn’t be possible without equity release” she adds.
“As political, economic and social changes seem to be continuing at breakneck speed, we can be sure that the profile of the lifetime mortgage customer will evolve with the times. It’s crucial that the industry remains alive to these developments and continues to offer customers the flexibility and security they are after.”