For the second consecutive year the equity release market expansion continued, with the average customer taking out an equity release plan in 2012 releasing £52,268, an increase of 7% on 2011’s £49,000.
According to analysis from leading independent equity release adviser Key Retirement Solutions, the total funds released across the market increased 15% to £961.41 million from £832 million.
Drawdown plans enabled customers to benefit from lower borrowing costs, as they can take funds when required rather than in a lump sum, leading to plan sales increasing 6.3% during the year to 19,675.
18% of customers are using some or all of the cash released to pay off mortgages while 22% are using the money to clear credit card debts or loans.
Home and garden improvements remained the most popular use of funds with 57% of people using some or all of their cash for those purposes.
Estate Agent Marsh & Parsons’ latest London Prime Market Monitor showed a rising proportion of homeowners are making use of equity release.
According to their research home buyers upsizing in the prime areas of London accounted for 19.3% of all moves in the last quarter of 2012.
Similarly downsizers are making up 6.6% of the market compared to 4.9% a year ago.
