A record breaking £1.02bn in equity was released between July and September, equivalent to £11m of property wealth unlocked each day, revealed the Equity Release Council’s (ERC) latest quarterly lending figures.
The quarterly figure illustrated a 24% increase on the same period last year, with a record 12,016 new equity release plans agreed over the three months.
In a bid to meet customer demand, the sector has continued to grow tremendously, and the number of products available in the market has trebled in the past two years.
According to the ERC, the average amount of property wealth unlocked by new customers has been broadly consistent as borrowers withdraw equity in modest amounts.
The figures showed that drawdown products were the most popular choice with three in five new customers choosing the plan over lump sum products.
Last month, government supported a recommendation by the Housing Communities and Local Government select committee for equity release to be signposted as a home finance option for older people.
ERC chairman David Burrowes said the equity release market was making an increasingly important contribution to the later life landscape on an individual, social and economic level.
He commented: “Government, regulators and industry must continue to seek ways to help people take a more rounded approach to later life financial planning.
“No one solution suits every individual need, and there is no doubt more people can benefit from considering property wealth alongside pensions, savings and other assets when making financial decisions – both for themselves and for those around them."
more 2 life chief executive officer Dave Harris added: “With the industry exceeding £1bn for the first time in a single quarter, these figures are the latest sign of a flourishing equity release market and is testament to how far the whole sector has come. It is clear that older homeowners are increasingly turning to equity release to unlock the wealth tied up in their homes to help to boost their finances.
“Whilst funding and innovation will be key in unlocking future growth of the market, the continued success of the equity release market also depends on advisers offering the product as an option to their clients. We must encourage advisers to take the necessary equity release qualifications or at the very least remain informed of the latest industry trends and product innovations in order to include it as part of holistic retirement planning discussions.”
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