For every £1 that was accessed by the UK population over 55-years-old through a pension scheme, 50p of housing wealth was withdrawn via equity release products. Equity release has enjoyed huge annual increases over the last seven years and is now considered to be a mainstream financial planning option to help those in later life. The Equity Release Council’s Spring 2019 Market Report found that annual lending increased for the seventh consecutive year to £3.94 billion by the end of 2018.
Between July and December 2018, 43,879 over-55 homeowners used equity release products to access money locked within their home. This represents a 23% increase from the figures within the Spring report in 2018. Of that amount, 24,907 new plans were agreed which also highlights an increase of over a fifth since H2 2017.
Over a third of mortgages held by people in the UK over 55-years-old are now choosing mortgage options that help with their older life. Lifetime mortgages, equity release options that recoup the loan after the house is sold rather than asking for monthly repayments, increased by 25% during 2018. Many users of this service choosing to withdraw the loan in monthly instalments in order to use it as a supplement to their income in later life.
Those looking to make housing alterations to help in later life or those looking for additional money to help younger relatives used drawdown lifetime mortgages. 64% of new customers opting for drawdown plans in H2 2018 and taking an average amount of £38,000 from the value of their home.