View more on these topics

Equity release hit £2.1bn in 2016, will be £2.75bn in 2017: Key Retirement


Equity release lending volumes hit £2.1bn in 2016, up 26 per cent on 2015, according to Key Retirement.

The total number of equity release plans rose 17 per cent in the period, from 23,747 to 27,666, according to the Key Retirement UK Equity Release Market Monitor.

Key estimates that lending will rise 28 per cent in 2017 to £2.75bn and that the number of new plans will rise 19 per cent to 33,000.

Key Retirement found that home and garden improvements are still the main reason consumers choose equity release, with 63 per cent of customers ranking this as their motivation in 2016.

However, equity release is increasingly being driven by customers wanting to clear mortgage debt.

Key found that 22 per cent of customers chose equity release for this reason, up 6 per cent in five years.

This represents the single largest shift out of all the popular reasons to choose a lifetime mortgage, including going on holiday and helping with regular bills.

Key Retirement technical director Dean Mirfin says that maturing interest-only mortgages with no repayment strategy will cause a boom in equity release.

He says: “Certainly equity release will become more important for interest only payment. We are seeing that already.”

Mirfin says around 40,000 interest-only mortgages will mature every year for the next five years, and the number will then increase.

Drawdown was the most popular plan in 2016, accounting for 62 per cent of all new plans.

The average age for those releasing equity was 72, unchanged from 2015.

However, Mirfin says the 65-69 age bracket will increasingly turn to equity release and become the main borrowing bracket.

Key Retirement’s figures include equity release figures from firms like small building societies, and so are typically higher than figures from bodies such as the Equity Release Council.


Equity release reaches record highs in third quarter

The value of equity release lending reached a record high of £571.6m in the third quarter of 2016, according to the Equity Release Council. The sector grew by 26 per cent year-on-year, the figures found, with total annual lending for 2016 on course to break through the £2bn mark for the first time, having reached […]


Santander launches fee-free fixes and H2B equity loan products

Santander has launched a range of two and five year fixed re-mortgage products with no product fees. The new products are available on products at 60, 75, and 85 per cent LTV, with interest rates ranging from 1.64 per cent for a two-year 60 per cent fix, to 2.34 per cent for a five-year 85 […]


The problem with a standalone equity release qualification

The discussion around whether to introduce a standalone equity release qualification shows just how complex the advice landscape has become. The concern is that advisers are not considering equity release products due to the current qualifications being more linked to mortgage advice. There is a real fear of failure to satisfy the regulator and ombudsman. […]

Champion the small-scale developer

Traditional development finance must price in project and liquidity risk, but if your project is completed and you have begun selling units you could be eligible for cheaper funding, writes Matthew Tooth of Lendinvest. A product which prices purely for liquidity risk is one way to help developers lower their costs. This type of product allows […]

Guide cover resized

Guide: Johnson Fleming’s managed auto-enrolment service for SMEs

Johnson Fleming has launched its new managed auto-enrolment service, designed to support SME businesses of up to 250 employees. The managed auto-enrolment service is not just about providing businesses with a software system for them to manage themselves, but more about outsourcing the administration of the project and scheme to Johnson Fleming’s auto-enrolment staff.


News and expert analysis straight to your inbox

Sign up