Homeowners aged 55 plus unlocked a record £971 million of equity from their home in just three months according to the latest figures from the Equity Release Council.
Its Quarter Two figures, which show activity in the equity release market between the beginning of April and the end of June, show the market is moving closer to achieving an unprecedented £1 billion of activity in just three months.
Numbers were up significantly on the previous quarter with total lending soaring by 12%. Meanwhile, the figures comparing the same quarter this year to last year showed a 39% increase.
According to Dave Harris, chief executive officer at equity release lender more 2 life, the data is an indication of the ‘impressive’ growth the sector has shown in the years and as more older homeowners used equity in their homes to boost their finances.
He added: “It’s hugely impressive that it has taken just five years for the industry to grow from £1 billion of lending a year to £1 billion of lending a quarter.
“If we continue at this rapid rate, we could be approaching an impressive £1 billion a month in the next five years.”
Over-55s look to housing wealth for financial planning
According to the Equity Release Council the number of customers taking out new plans in the last three months was 11,295 – a figure which has driven the quarter’s increase. The previous quarter saw 10,195 people coming to the market and this was 8,454 a year earlier
Three in five new customers chose drawdown lifetime mortgages, which allowed them to access equity from their homes in multiple instalments over time – a process which limits how much interest they owe.
Meanwhile two in five went for the lump sum mortgage option and received a single payout instead – this is the largest share since the beginning of 2017.
David Burrowes, chairman of the Equity Release Council, said property wealth had an important role to play as a part of the solution to today’s many pressing social and economic problems – from the funding of social care to easing intergenerational pressures by helping people to pass on a ‘living inheritance’.
He added: “Consumers are releasing money from their homes for a variety of reasons, and features like downsizing protection and repayment options mean today’s equity release product range is designed to evolve as people age and circumstances change.
“Growing choice and flexibility has propelled equity release into the mainstream consciousness, and it is crucial that consumers are encouraged to weigh up all the choices available to them, to help create a rounded approach to later life planning that considers property alongside pensions and other assets.”