Retired homeowners unlock £136 of property wealth each second

Written by Oliver Wade
24/01/2019

In the fourth and final quarter of 2018, £136 of housing wealth was unlocked every second between October and December, almost matching the weekly state pension allowance of £164, according to the year-end market figures from the Equity Release Council (ERC).

The ERC revealed that equity release experienced a record fourth quarter, resulting in an unprecedented 82,791 customers making use of property wealth throughout 2018 to support their financial goals in later life.

Of the 46,397 deal s agreed last year, almost 13,000 (12,891) of them were completed between October and December last year, representing a 25 per cent increase year-on-year.

Furthermore, the council found that total lending activity for 2018 grew for a seventh consecutive year to reach £3.94bn, up 29% year-on-year, with £1.08bn of housing wealth unlocked in the final three months. The ERC reported that this was the most activity seen to date on either a quarterly or annual basis.

The 46,397 new plans agreed in 2018 via Council members were more than double the 22,749 seen three years ago in 2015, and four times the 11,484 seen over the course of the 1990s when consumer-focused industry standards were first established.

Commenting on the statistics, ERC chairman David Burrowes said: “The equity release market continues to experience sustained growth as it proves a vital tool for consumers looking to make the most of their financial resources in later life. Older homeowners are realising in growing numbers that property wealth can play a crucial role in supporting their retirement alongside pensions, savings and other assets.”

Burrowes added that the market is “maturing and adapting to offer a new level of flexibility to suit a range of financial needs and ambitions”.

Also commenting, Key CEO Will Hale: “Over the last 12 months we have seen the equity release market grow from strength to strength, despite uncertainty in the wider economy. This year-on-year growth is a continued trend seen over the last seven years and in 2018 we saw total lending as well as drawdown and advances increase to end the year just shy of the £4 billion mark.

"This is a significant step forwards when you consider that just five years ago, we were delighted to have broken the £1 billion barrier.”

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