Retired homeowners are increasing their finances by an average of £76,967 as the equity release market continues to break records, according to new data from the UK’s leading independent equity release adviser Key.
The adviser revealed that customers released nearly £5,500 more on average in the three months to 1 October when compared with the same period a year earlier (£71,483). The total value of new property wealth released in the three months increased by 25% on last year’s figure to £933.9m, while plan sales grew by 16% to 12,133.
Key reported that the money gained through equity release is “typically used for a variety of different expenses”. In the third quarter of 2018, 66% of customers used some or all of the cash to improve their homes or gardens, often ‘age proofing’ them to ensure they are able to stay in their homes.
Just under a third of borrowers used the proceeds of equity release to repay unsecured debts, while over a quarter (27%) gifted some or all of the money to assist family or friends.
Geographically, all areas of the country experienced strong growth in plan sales and value released, with Londoners receiving the largest cash boost at £141,671. However, all regions across the UK saw homeowners release substantial new property wealth, with the lowest being £50,000 in Northern Ireland.
Commenting on the figures, Key CEO Will Hale said: “The market is on course to reach or even pass the £4 billion mark this year given that the last three months of the year is often one of the busiest quarters.
“The substantial amounts that customers are able to release highlights how vital property wealth is to retirement planning and the expansion is being driven by customers realising they can address a wide range of financial issues.
“Increased flexibility of equity release plans means older homeowners can use their money in the most appropriate way for them and their families and independent expert advice is key to ensuring they can do so.”
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