Older homeowners unlocked £1.94 billion from their properties in the first six months of 2021, as the equity release market continued its lockdown recovery.
Figures from equity release adviser Key showed the number of equity release plans taken out rose by 3% in the six months to June 30 to 20,445 compared with a year ago, while the total value of new equity released jumped 32% from £1.47 billion to £1.94 billion.
Around seven in 10 (71%) of customers took out drawdown plans in the first half of the year, taking an initial average amount of £56,744. A further £666 million was reserved for future use.
Key said more than half (52%) of the money from equity release was used to clear mortgages (45%) and manage unsecured debts (7%). Another 23% was used to help family and friends.
Over half of those who used their equity to support family and friends used it to provide a house deposit (52%) or an early inheritance (59%).
Key said ‘big ticket’ expenses saw an average of £74,894 in borrowing being repaid and £72,520 being gifted.
Will Hale, CEO at Key, said: “The equity release market is benefiting from the success of the vaccination programme putting the country back on the delayed road to recovery with total value released up strongly and the number of plans taken out increasing.
“Big ticket items like repaying outstanding mortgages, managing unsecured debt and helping family members get their foot on the property ladder is what motivates customers. This is intergenerational fairness in action and equity release customers provided almost £1 million per day in deposits during the stamp duty holiday.
“Drawdown plans remain dominant and with over 710 different products on the market, those who choose equity release to manage their borrowing benefit from more flexibility than ever – including the opportunity to make ongoing interest and fee free capital repayments.”
