Over-55 homeowners unlocked £1.17bn of property wealth during the second quarter of the year, according to new statistics published by the Equity Release Council.

This represented a 2% rise from £1.14bn in Q1 2021 and was up 67% year-on-year from Q2 2020 (£698m) during the first COVID-19 lockdown.

The Council also reported that 20,352 new and returning customers accessed property wealth between April and June, to edge the figure closer to pre-pandemic activity levels. This was a rise from 16,527 in Q1 2021 and from 13,617 in Q2 2020, when households and employers were adjusting to pandemic conditions.

Equity Release Council chairman, David Burrowes, said that figures show the equity release market is showing signs of “stability and durability”.

“We’re now seeing activity levels steadily returning back to that status quo, with some existing customers returning to make withdrawals that were put on hold last year,” Burrowes said.

“The gradual recovery suggests people are carefully weighing up their circumstances and long-term needs, helped by specialist financial and legal advice, with speculation about a spike of activity during the pandemic so far proving unfounded.

“The steady recovery has been helped by confidence in the wider property market, where house price gains over the last year have given many homeowners more equity at their disposal. Equity release has become a socially important means for one generation to help another, as well as meeting later life financial needs.”
 
The Council’s figures revealed that returning drawdown activity made the strongest recovery of any segment compared with Q2 2020, with customer numbers climbing by 67%, having been the most subdued part of the market during the pandemic.
 
Drawdown lifetime mortgages remained the most popular option among new customers (55%), while 45% opted for a lump sum lifetime mortgage.

June was the busiest month for new plans agreed during Q2 (3,348), which the Council suggested was likely to be influenced by older customers releasing equity to help younger generations fund a house move ahead of the tapering of the stamp duty holiday deadline at the end of the month.

Key CEO, Will Hale, commented: “Gifting, mortgage repayment and debt management continued to be the driving force behind decisions for many customers in Q2 with the stamp duty holiday providing a particular boost. With this government initiative now tapering off, it will be interesting to see how the property market fares for the remainder of the year.

“However, it is encouraging to see how equity release is increasingly being recognised as a vehicle to fund property purchases – whether that be indirectly in terms of people helping children or grandchildren with a deposit or enabling older customers to move home themselves.”

more2life CEO, Dave Harris, added: “Today’s figures are an encouraging sign that the equity release market is well on its way to returning to pre-pandemic levels. With more than £1bn of property wealth accessed in Q2 alone, it’s clear that the appetite for equity release among older homeowners is growing as the UK begins to look beyond the pandemic.

“This uptick in activity has undoubtedly been helped by the country’s successful vaccine rollout, the relaxation of lockdown restrictions and sustained house price growth, all of which has boosted consumer confidence.”

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