There has been a big jump in the number of retired homeowners using their property wealth to pay off credit cards and loans, according to Key.
The latest market monitor report from adviser Key, shows that more than one in three, 35 per cent, equity release customers are now using funds for this purpose, the highest percentage for three years.
This is an increase on previous years figures, when around 30 per cent of equity release customers used funds to pay down unsecured debts in the first quarter of the year.
In addition this report found a further 28 per cent used of customers used some – or all – of these funds to pay off outstanding mortgage balances in the first three months of 2019.
Customers released an average of £75,032 during this quarter. The most popular use for this remains paying for home and garden improvements. Six out of 10 equity release customers said they would use some – or all – of their funds for this purpose.
Around one in three, 31 per cent, use some of these funds to pay for holidays, while 30 per cent said this cash would be used to help the family.
This market monitor also confirms that the equity release market continues to grow, at a significant pace.
It shows total new lending in the equity release market rose to £839.58m in the first quarter of this year, with a further £340.42m reserved through future drawdown facilities.
It said this takes the value of the market in to £1.18bn – up from £1.03bn in the first quarter of 2018.
Key chief executive Will Hale says: “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.
“The current challenging economic environment has seen a move away from holidays and home improvements to people tackling pressing immediate issues such as to pay off debt.”
This market monitor — which analyses data reflecting both Equity Release Council members and non-members — found there was significant regional variation.
“In the West Midlands the size of funds released via equity release rose by 24 per cent over the past year. There were 20 per cent rises in the East Midland and North East.
However in contrast there was a decrease in sums being released in both London and East Anglia, although in both areas house prices have slipped moderately over this period.