Equity Release Grows For Seventh Consecutive Year
As people look for ways to finance their later life, equity release ended 2018 with record levels of investment.
Total lending in equity release has grown for the seventh consecutive year. The 3.94 billion extracted through equity release plans is a 29% increase on the figures for 2017. Additionally, £1.08 billion of the total figure was made from the final three months of 2018, highlighting the huge increase around winter and Christmas.
In 2018, 83,000 homes released some of the money in it, overwhelmingly to fund later life and help younger relatives. 46,397 of these properties represented new business and is an increase of 25% from the figures taken a year ago.
The growth in equity release has been attributed to the rise available products. The 139 products currently available is over double the 58 that were on the market in 2017.
David Burrowes, Chairman of the Equity Release Council, said: “The equity release market continues to experience sustained growth as it proves a vital tool for consumers looking to make the most of their financial resources in later life. Older homeowners are realising in growing numbers that property wealth can play a crucial role in supporting their retirement alongside pensions, savings and other assets.
“Industry, regulators and Government must continue to explore how we can help generations of retirees, both today and in the future, to adopt a more rounded approach to later life planning. Equity release now plays a pivotal social role and the Equity Release Council will continue to ensure that products are underpinned by robust consumer safeguards.”
Alice Watson, head of marketing and communications at Canada Life Home Finance, said: “Lenders have a responsibility to innovate and support advisers in the growing market. But the future success of equity release relies in large part on the sector pulling together to demystify the products and features and continuing to win consumer confidence.
“These are historic figures for the equity release market. If the industry continues to work together to meet evolving needs, customers and advisers will continue to act as the engine for growth.”
Is this a sustainable way to finance later life? What does this mean for the conveyancing sector?