Equity release lending soars 44% to £800m in Q3

The value of equity release lending rose by 44% year-on-year in Q3, as lending passed £800 million in a single quarter for first time, according to the latest figures from the Equity Release Council.

Related topics:  Retirement
Rozi Jones
30th October 2017
house and savings
"With the level of activity this quarter up 44% year-on-year, the amount of lending during the first nine months of 2017 has already surpassed the £2bn lent at the end of last year"

Over-55s withdrew a total of £824 million of property wealth from their homes via equity release plans during Q3, up from the £701 million recorded in Q2 and £572 million lent in Q3 2016.

Q3 lending activity has risen by 82% in the last two years, up from £453 million in Q3 2015. New customer numbers have risen 64% over the same period from 6,049 in Q3 2015.

The amount of lending during the first nine months of 2017 has now surpassed the £2bn lent during the whole of 2016.

The proportion of new customers choosing drawdown lifetime mortgages over lump sum lifetime mortgages or home reversion plans in Q3 2017 rose by nine percentage points to 77% from the previous quarter (68%) and 15 percentage points year-on-year (from 62%).

Nigel Waterson, Chairman of the Equity Release Council, commented: “The sustained growth in housing wealth withdrawals is indicative of a wider shift in the way consumers are approaching their retirement planning, by taking a broader range of financial options into consideration.

“Property is, for many people, their largest asset and has the potential to play an increasingly important role in the future of retirement funding. The combination of rigorous safeguards and flexible products in today’s market is one reason why housing wealth is now being used to support a wide range of financial goals. These range from boosting pension income and supporting retirement lifestyles to funding home improvements and adaptations, consolidating debts and providing a living inheritance to younger generations.

“As more homeowners look to housing wealth as a source of retirement finance, The Council and its members will continue to ensure the highest standards of customer protection are in place alongside the continuing innovation that has seen the available product range triple since 2007.”

Dave Harris, Chief Executive Officer at more 2 life, added: “These latest record breaking results show the increased appetite among older borrowers to unlock the wealth tied up in their homes to help fund their retirement. With the level of activity this quarter up 44% year-on-year, the amount of lending during the first nine months of 2017 has already surpassed the £2bn lent at the end of last year, which is a fantastic outcome. Demonstrating the huge strides the equity release market has taken towards becoming a mainstream retirement solution.
 
“Whilst these results are extremely encouraging, it is important for lenders to continue developing their product offerings and for advisers to ensure they are discussing equity release as a viable borrowing solution to their clients. At more 2 life, we are committed to expanding the market further through greater innovation and flexibility, as illustrated by the recent lowering of the minimum age requirement for our popular Capital Choice plan, allowing more borrowers access to the product. We remain dedicated to advisers and helping support them through the advice process, urging them to think outside the box when discussing options with their clients.”

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