"Housing wealth – often people’s most valuable asset – is an important part of bridging the gap between the comfortable retirement people want and the retirement they can afford"
The figure represents an increase of over a third (36%) in the value of lending when compared to Q2 2016.
Continued growth means that second quarter lending activity has now risen 82% in the last two years, from £384 million in Q2 2015. The Q2 2017 total amounts to almost 90% of the activity recorded during the whole of 2011 (£789m) in the wake of the financial crisis.
Council members supported more than 16,000 equity release customers between April and June this year. Of these, over half (8,454) took out new equity release plans: 27% higher than the 6,671 new plans recorded in Q2 2016.
Q2 2017 also saw 6,566 returning drawdown customers, up 9% from the previous quarter.
In terms of product choices, drawdown lifetime mortgages remained the most popular product in the market in Q2 2017. 68% new customers opted for drawdown in the quarter, up from 67% in Q2 2016 and 65% in Q2 2015. Drawdown also made up 63% of total Q2 lending activity in terms of value, up from 59% a year earlier.
Lump sum products meanwhile accounted for 32% of new plans agreed and 37% of total lending in the second quarter. The value of lump sum lending increased by 25% over the last 12 months from £209 million in Q2 2016 to £262 million in Q2 2017. In comparison, drawdown lending rose 44% year-on-year from £304 million to £438 million.
Nigel Waterson, Chairman of the Equity Release Council, commented: “Continued rapid growth in housing wealth withdrawals reflects an increasing appetite among older consumers to utilise bricks and mortar for funding retirements.
“The retirement income pressures facing many savers in the era of defined contribution pensions and low interest rates are encouraging homeowners to consider a wider range of financial options. Housing wealth – often people’s most valuable asset – is an important part of bridging the gap between the comfortable retirement people want and the retirement they can afford from their savings.
“It is vital we build on recent work by regulators and industry to encourage more joined-up thinking between related areas of financial services, so that consumers have the best support for their transition into later life.”
