Equity release market rises 8% in third quarter

A total of £988m in property wealth was unlocked by over-55 homeowners between July and September this year, a rise in activity of 8% from Q2, according to the latest figures from the Equity Release Council (ERC).

The representative body for the sector revealed that equity release products provided UK over-55s with £11m per day during Q3, up from the total £911m provided during Q2.

The ERC’s quarterly market figures revealed Q3 was the busiest quarter of 2019 so far, both in terms of new plans agreed and the total property wealth being accessed by new and returning customers – a total of 11,419 new customers opted to release cash from their properties, a 6% increase from Q2.

Chairman of the ERC, David Burrowes, said: “As a nation with an ageing population and a growing need to support longer lives, it is important not to overlook property wealth in modern retirement planning conversations.

“Today’s equity release market is offering new solutions to fund later life, by combining rigorous consumer protections with more product choices and flexibility to help people meet their financial needs and goals.”

The ERC also highlighted official demographic projections, which have shown the number of over-55s will increase by 5%, or 23 million people, over the next 20 years – to make up more than a third of the total UK population.

Those aged 70 or above – 70 being the average age for taking out a lifetime mortgage, the most common choice of method to unlock property wealth – will increase from 9 million to 13 million over the same period, a 44% rise.

CEO of equity release lender more2life, Dave Harris, commented: “Today’s figures highlight the fact that equity release is continuing to help increasing numbers of homeowners boost their retirement income, despite ongoing political and economic uncertainty.”

“In order to maintain the level of growth we have seen in recent years, however, it will be vital for lenders to continue developing innovative solutions, so that both current and future retirees have greater choice and flexibility at their fingertips.

“In particular, having greater flexibility in terms of drawdown lifetime mortgages will be key for retirees who are turning to equity release to boost their daily income.

“Encouraging more advisers to consider and understand equity release will also be important if the sector is to continue growing. Through lender-based initiatives, like symposiums and online resources, we can help educate more advisers on the later life lending market, and explain how incorporating lifetime mortgages into their conversations with clients will help boost their business, and help more customers find the right solution to meet their needs.”

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