Older homeowners have received £1.94bn in property wealth in the first half of the year as the equity release market continued its lockdown recovery, new data from Key has revealed.

Key’s data showed that the number of equity release plans taken out has risen by 3% in the six months to 30 June to 20,445 plans compared to last year.

The total value of new equity released also jumped by 32% from £1.47bn to £1.94bn, while a further £666m has been reserved for future use.

In total, the average amount of equity that customers are releasing has increased to £94,982, up from £72,340 in H1 2021. Key suggested there is a trend in customers focused on “big ticket” expenses for equity release, such as mortgage and unsecured debt repayment, with an average of £74,894 being released, as well as gifting (£72,520), rather than for holidays (£16,458) and home improvements (£16,907).

Key’s latest figures also revealed that the total value of new equity released at £1.94bn was higher than the £1.68bn released in the first half of 2019, before the onset of COVID-19.

“The equity release market is benefiting from the success of the vaccination programme putting the country back on the delayed road to recovery with total value released up strongly and the number of plans taken out increasing,” said Key CEO, Will Hale.

“Big ticket items like repaying outstanding mortgages, managing unsecured debt and helping family members get their foot on the property ladder is what motivates customers. This is intergenerational fairness in action and equity release customers provided almost £1m per day in deposits during the stamp duty holiday.

“That said, customers need to speak to a specialist adviser who can help them make smart sustainable choices around if, when and how to borrow in retirement.”

Commenting on Key’s research, Legal & General Home Finance CEO, Claire Singleton, added: “We have seen a lot of uncertainty during the first half of the year, but the equity release market remains on a steady path as we begin to return to some normality. This has been helped by a surge in product choice, as well as falling rates making it much more accessible.

“This combination will continue to make accessing property wealth a more viable option for those customers who want to remain in their homes, rather than downsize to a smaller property.”

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