In the bitter economic climate:
- 36% of customers used their equity to repay a mortgage, up 31% on 2010. In most cases, this was either because of a shortfall in their endowment policies and other investment vehicles, or higher living costs, which left little surplus income to meet monthly mortgage repayments
- 23% of customers (up 22% on 2010) used their equity to help struggling family members, whether to pay down their debts, support their incomes or provide the deposit required to buy a home
- 16% of customers, up 2% on 2010, used their equity to create a cash surplus for the regular payment of soaring utility bills
Also, faced with high living costs, soaring debts and stringent lending criteria, the number of homeowners enquiring about equity release doubled during 2011. Last year, the total number of enquiries received by Responsible Equity Release rose by 91% on 2010.
Steve Wilkie, Managing Director, Responsible Equity Release, commented:
"In such a dire economic climate, it will come as no surprise that there has been a sharp rise in the number of people turning to the equity in their homes to help themselves and their families pull through.
"The toxic combination of high debts, high inflation and high unemployment has stretched many people's incomes to breaking point and the money tied up in our houses is providing a degree of relief.
"Five or six years ago, the majority of people releasing equity did so to improve the quality of their retirement, but these days a growing number of equity release plans are being used simply to make ends meet.
"Although home and garden improvements in the run-up to retirement remain at the heart of equity release, there's no doubt that the dynamic of the sector has changed in recent years.
"What's also interesting is that a large percentage of the enquiries we now get are through word-of-mouth, which suggests people are more familiar — and comfortable — with equity release."
