"As the range of later life products continues to grow, it is vital we encourage customers to consider all available options,"
£11m of property wealth is now being withdrawn every day, as an unprecedented 12,016 new equity release plans were agreed over the quarter, equating to 6% more new customers than in Q2 2018.
The average amount of property wealth unlocked by new customers has remained broadly consistent, showing people are withdrawing equity in modest amounts. The average new lump sum lifetime mortgage plan was 5% lower than in Q2 2018, decreasing from £95,991 to £91,398, while the average first instalment from a drawdown plan saw a marginal quarterly increase of 3% from £63,584 to £65,343.
Drawdown products remain the most common choice among new customers, with 63% choosing this type of plan over lump sum products.
Total lending of £99m to returning drawdown customers in Q3 2018 was also the largest quarterly amount on record – a result of the growing number of customers with these products. However, the average drawdown taken per customer was marginally lower than the previous quarter, for the second quarter in a row, decreasing from £11,543 to £11,443.
David Burrowes, chairman of the Equity Release Council, commented: “The equity release market is making an increasingly important contribution to the later life landscape on an individual, social and economic level. Older homeowners are discovering in growing numbers that property wealth can play a key role in funding a myriad of needs, from making home improvements and adaptations to paying for social care and giving financial help to younger family.
“Government, regulators and industry must continue to seek ways to help people take a more rounded approach to later life financial planning. No one solution suits every individual need, and there is no doubt more people can benefit from considering property wealth alongside pensions, savings and other assets when making financial decisions – both for themselves and for those around them.
“As the range of later life products continues to grow, it is vital we encourage customers to consider all available options, and ensure they can access appropriate guidance and specialist advice to weigh up the benefits, costs, flexibilities and protections to best meet their current and future needs.”
