"Cost of living pressures are just one of many reasons why homeowners are choosing to cash in on years of wealth accumulated in their homes."
Its figures show the sector has now returned to growth for the first time since 2018. Customers borrowed £1.34bn of property wealth via equity release products from October to December, including £1.2bn via new plans and £153m via drawdowns or further advances. This makes Q4 2021 the busiest on record for lending activity, surpassing the £1.17bn recorded in Q2.
Total lending to homeowners aged 55+ via lifetime mortgages and home reversion plans grew by 24% year-on-year to £4.8bn, including £4.3bn via new plans and £500m to returning customers.
Annual equity release lending has now surpassed the previous record set in 2018 (£3.94bn), influenced by factors including growing choice and competition in the market, customers seeking additional sources of funds for later life, and the strong performance of the UK housing market with the average house price increasing by £25,000 in the year to November 2021.
For the year as a whole, 76,154 customers took out new equity release plans, made use of drawdown reserves or agreed extensions to existing plans. This was a 4% increase year-on-year from 72,988, although it remains below the peak of 85,497 seen in 2019.
David Burrowes, chairman of the Equity Release Council, commented: “Cost of living pressures are just one of many reasons why homeowners are choosing to cash in on years of wealth accumulated in their homes. Increasing loan sizes partly reflect the rise in house prices and a more affluent type of customer using lifetime mortgages to plan their finances or gift a living legacy to family members.
“Having proved itself to have solid foundations through a period of uncertainty, the equity release market’s return to growth has just as much to do with trust and innovation as it does with external factors as households look to manage their finances in later life.
“Equity release products have continued to evolve in recent years with new providers and features adding to their appeal. Increasingly flexibility has brought lifetime mortgages closer to their residential equivalents, by offering capital or interest payment options alongside long-term, time-honoured protections against rising interest rates and negative equity.
