Equity release breaks £1bn mark in Q3

The Equity Release Council’s newest figures report that homeowners released £1.02bn of property equity from July to September.

This compares to the £971m released in Q2 of this year, and £824m in Q3 2017, equating to a yearly increase of 24 per cent.

In contrast to this sharp growth, the council points out that the average amount withdrawn as a lump sum decreased 9 per cent on a yearly basis, from £100,389 to £91,398. Quarterly, the fall stands at 5 per cent, from a total of £95,991 in April to June.

Regarding the average first instalment in a drawdown plan, the product that 63 per cent of new customers plump for, the figure grew 1 per cent on a yearly basis, from £64,793 to £65,343, and quarterly, was up 3 per cent, from £63,584.

Equity Release Council chairman David Burrowes says: “Older homeowners are discovering in growing numbers that property wealth can play a key role in funding a myriad of needs, from making home improvements and adaptations to paying for social care and giving financial help to younger family.

“Government, regulators and industry must continue to seek ways to help people take a more rounded approach to later life financial planning. No one solution suits every individual need, and there is no doubt more people can benefit from considering property wealth alongside pensions, savings and other assets when making financial decisions – both for themselves and for those around them.

“As the range of later life products continues to grow, it is vital we encourage customers to consider all available options, and ensure they can access appropriate guidance and specialist advice to weigh up the benefits, costs, flexibilities and protections to best meet their current and future needs.”

More 2 life chief executive Dave Harris adds: “These figures are the latest sign of a flourishing equity release market and is testament to how far the whole sector has come.

“Whilst funding and innovation will be key in unlocking future growth of the market, the continued success of the equity release market also depends on advisers offering the product as an option to their clients.

“We must encourage advisers to take the necessary equity release qualifications or at the very least remain informed of the latest industry trends and product innovations in order to include it as part of holistic retirement planning discussions.”

Key chief executive Will Hale anticipates even stronger growth in the near-team. He comments: “When you consider that Q4 is often stronger than Q3 in terms of lending, today’s figures suggest that we may well reach and even break the £4bn barrier in 2018.  We have seen more than 33,500 customers release over £2.86bn thus far this year – a record in itself – and a clear indication that housing equity is firmly established as a normal part of financial planning in later life.”

Meanwhile, Canada Life head of marketing and communications Alice Watson says: “This is a significant milestone for equity release but it must not be an excuse to stop innovating. If we continue to listen to the needs of customers and of advisers, there is no reason why this sector cannot grow even more in the coming years.”

In late September, the government showed support for the elderly being signposted to equity release as a finance option, and just this week, a panel of equity release experts at the Mortgage Strategy Leaders Forum opined that providers should “de-bunk” certain myths in an effort to see the sector expand more rapidly.

Recommended

Older-Old-Couple-Pension-Pensioners-Elderly-700.jpg

Retirement Advantage Equity Release rebrands as Canada Life Home Finance

Canada Life, which bought Retirement Advantage in January of this year, has rebranded the retirement income business as Canada Life Home Finance. The Retirement Advantage website has been shut down and its product and adviser portals have been moved to the Canada Life parent website. Canada Life Home Finance head of marketing and communications Alice […]

Threefold increase in number of equity release products

The number of equity release products has trebled over the past two years, according to new data from Key Partnerships. There are now 144 different plans available, up from just 47 in October 2016. This mushrooming of option, highlights the need for borrowers to get appropriate advice to ensure they have the most suitable product. […]

Parliament-UK-Government-Dusk-700.jpg

Govt backs signposting to equity release within financial guidance

The government has shown support for the elderly being signposted to equity release as one of their finance options. Responding to the second report of 2017-19 of the Housing, Communities and Local Government Select Committee inquiry into housing for older people, the government said the new single financial guidance body should include information on equity […]

A question of service

Roy Armitage, head of credit, LendInvest Selling a loan is the part of a lender’s workload most visible to brokers and borrowers. Just as crucial – but less frequently observed – is how that lender services that loan. A commitment to quality servicing is one that’s front and centre for us at LendInvest and it’s […]

Newsletter

News and expert analysis straight to your inbox

Sign up