Home improvements were the main driver for people taking out a lifetime mortgage in 2022, according to new figures from Responsible Life.
The later life mortgage broker’s findings suggested that three out of 10 (30%) borrowers who released equity from their homes last year, did so to renovate their properties.
Paying off a mortgage (27%) and early inheritance (9%) were the next most popular reasons for unlocking house wealth, with supplementing income and contributing to house deposits also favoured.
In nine of the 12 months in 2022, Responsible Life’s research indicated that home renovation was the primary motivation for customers to take out a lifetime mortgage. The broker described this as a “dramatic shift” from previous years. Through 2020 and 2021, there was not a single month when home improvement topped the list as the main reason customers were accessing equity release loans.
Responsible Life suggested this change in trend was a temporary one driven by the pandemic property boom, which has unlocked greater options in retirement for those homeowners who are mortgage-free.
“The post-pandemic property boom saw more homeowners using the wealth locked up in their homes to improve their properties,” commented executive chairman of Responsible Life, Steve Wilkie. “With house prices ballooning, people took the opportunity to take this boost in wealth to give their homes an update.
“This desire to upgrade could also have been a symptom of lockdown. Millions of us spent prolonged periods stuck at home. It made us see our properties in a different light – as not just a roof over our heads, but also a sanctuary.
“Life has returned to normal, and November and December were the first signs that the home improvement trend has been taken over by more prudent financial planning in light of higher living costs. For the first time in eight months, paying off the mortgage once again became the main reason for people unlocking wealth in their homes.”
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