Nearly £1 billion was released through property wealth in the third quarter of 2019, up 8% on the previous quarter, according to new figures from the Equity Release Council.
In the three months from July to September, £988 million of funding was provided to homeowners aged 55 and over, the equivalent of £11 million every day. It marked the busiest quarter of 2019 to date, both in terms of new plans agreed and total property wealth released.
A total of 11,419 new customers opted to release cash from their homes in the third quarter, a 6% increase on the previous quarter. According to the sector trade body, over 33,000 new customers have chosen to access their property wealth via equity release so far this year.
David Burrowes, chairman, Equity Release Council, said: “The result of buying property and making mortgage payments during their working lives is that bricks and mortar have become many people’s single biggest financial asset when they reach later life. Industry, regulators and government must continue to promote and encourage lifelong savings habits, while also recognising that retirement financial plans are best made by taking all assets into account.”
Alice Watson, head of marketing and communications, Canada Life Home Finance, welcomed the boost in figures: “It’s great to see yet more expansion in the equity release market. This growth is especially positive given the wider political and economic malaise.
“With over 30,000 new customers taking out equity release this year, this is a real vote of confidence in the industry, and a sign that more people are viewing their wealth holistically. We think this is evidence that equity release is becoming an increasingly important tool in mainstream financial planning.
“Further market growth wouldn’t be possible without the kind of innovation that has continued to invigorate the industry, but the most successful products and services will continue to be those that meet customer demand.”
Watson said the industry must also ensure that advisers are given enough help and information, following research by Canada Life which found that advisers ranked getting more support as the number one thing needed to make equity release become more attractive and accessible.
Stephen Lowe, group communications director, Just Group: “Consumers are benefitting from the combination of more competition with more product features to allow good value, personalised plans.
“A measure of the pace of innovation and the emergence of new customer segments is that equity release plans now have 10 times more product features than just five years ago, according to the ERC.
“Home ownership levels are at their highest in later life and the average home value of an equity release customer is significantly higher than the average UK house price. Property wealth is set to provide an important source of funds for an increasing number of homeowners from right across the wealth spectrum in the coming years.”