"While the market is not seeing the double-digit growth of recent years, it continues to prosper and Q3 2019 has been the strongest quarter this year"
Its data shows that 11,772 plans worth £886.59 million were taken out in Q3 with an additional £368.58 million reserved for future use. The volume of plans taken out saw quarterly growth of 8% but is but down 3% year-on-year.
Drawdown products (both enhanced and standard) now account for 75% of all equity release plans sold, compared to 62% in Q3 2018.
However borrowers are remaining cautious, with the average initial amount released falling from £60,922 a year ago to £58,729.
The increasing popularity of these drawdown products also resulted in the overall average amount released falling from £76,967 in Q3 2018 to £75,300 on an average loan to the value of 24%.
Additionally, Q3 saw an increase in the number of people choosing to ‘remortgage’ their equity release plan to release more funds or save money - at 5% compared to 3% in 2018.
Will Hale, CEO at Key, said: “While the market is not seeing the double-digit growth of recent years, it continues to prosper and Q3 2019 has been the strongest quarter this year with people releasing over £887 million and reserving a further £369 million. The growth in popularity of drawdown, the smaller amounts released and the increasing numbers of customers looking to remortgage, all points to borrowers who see the value of using their housing equity but want to do this as cautiously and responsibly as possible.
“Historically low rates and the wide range of products with innovative features mean that those who do want to help themselves or their families by accessing the value tied up in their home have a range of options. However, it also means that specialist later life advice is vital as making the wrong choice around whether to borrow, how much to borrow and how to borrow can have long term consequences.”
