More home owners repay debt through equity release
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The proportion of home owners who use equity release as a way of paying down debts shot up to 35% during last year, from 11% in 2008.
The latest market figures from Key Retirement Solutions show that using equity release to pay debts such as loans and credit cards jumped 24% over the course of last year.
Dean Mirfin, group director at KRS, says: “The uses of equity release continue to be widespread, however the considerable increase in the use of funds to repay debt is one of the greatest trend changes we have seen.
“The trend of debt repayment mirrors the trend across all ages in the UK of clearing debt and freeing up more disposable income and no doubt we will see this continue further still in 2010.”
But the data also shows that the number of home owners using an equity release plan to clear their outstanding mortgage dipped last year, going from 22% in 2008 to 20% in 2009.
Overall lenders advanced £1.02bn through equity release products last year, down 14% from the £1.19bn of new equity release lending in 2008.
The number of new plans in 2009 was down 17% to 21,305, though plans numbers have held at this level since last June.
