Home owners are selling stakes in their homes in order to pay off their mortgages, show figures from Bridgewater Equity Release.
The home reversion provider has analysed completed applications over the last three years to find out why customers opt for home reversion plans and what they use the released equity for.
Repaying the mortgage emerged as the top reason for choosing home reversion plans, with almost 30% of customers last year planning to repay their mortgage with the released cash.
More home owners are using home reversion to carry out home improvements, with just over 17% choosing to use released equity in this way last year.
A further 15% use home reversion plans to consolidate debts other than their mortgage.
Some 6.5% use the released funds to boost their retirement income.
Bridgewater has also seen a drop in the number of those using the money to travel and as a gift to others.
No customers in 2009 used their equity as an emergency fund or to fund long-term care, but Bridgewater believes this may change in future as the government reviews its social care policy.
Peter Welch, head of sales and distribution at Bridgewater, says: “Using the equity in the home to clear the mortgage and other debts will remain strong drivers for the equity release client base however products such as home reversions can provide solutions for many individuals reviewing their current options.
“Advisers should be on the look-out for those who fit the bill and there is always the potential to work with mortgage advisers who do not cover equity release to ensure the introduction of this growing band of potential clients.”