The equity release market is on track to surpass the £4bn mark in total equity unlocked this year, according to new data published by Key.

Latest figures revealed that equity release customers took out £1.05bn in property wealth in the three months to the end of September. The equity release adviser’s data also showed the total value of equity that was released during the quarter climbed by 18.8% from £884m in Q3 last year.

Customers on average released £101,593 in Q3 – around 23% higher than the £82,827 in third quarter of 2020. However, figures also showed the number of equity release plans taken out decreased by 3.2% year-on-year to 10,333, having stood at 10,671 in Q3 2020.

With big ticket items such as debt management and gifting behind nearly two-thirds of the equity released in Q3 2021, Key suggested that these choices are driving the market, as customers with more discretionary needs continue to consider their options.

Nearly three quarters of the money released (73%) was used for debt management and to helping family and friends in the three months to end of September. Around £588m of the money released in the quarter was used to clear debts, while 42% of the cash given to family and friends was used for house deposits, and 36% given as an early inheritance.

Total equity released in the first nine months of 2021, at £2.99bn, is just short of the £3.4bn released in both 2020 and 2019, putting the market on course for a record £4bn, Key’s data highlighted.

“Against the backdrop of a pandemic, the equity release market is on track to break the £4bn barrier and potentially even touch £4.5bn by the end of the year,” commented Key CEO, Will Hale.

“This performance demonstrates how modern equity release products are now embedded within the mainstream financial services market, offering low rates and flexible features to address a wide range of different customer needs and wants.

“This year we’ve seen increasing numbers of people using equity release to support families, manage their current borrowing and use the historically low rates to remortgage their existing equity release plans.

“Whilst many plans have been put on hold during the pandemic, we also expect to see the return of people looking to boost discretionary spending as they look again at how to fund their later life ambitions.”

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