27th October 2015
Equity release lending rose by 21% year-on-year to hit £452.6m in the third quarter, setting a new record.
It was also the biggest quarterly rise for 11 years, figures from the Equity Release Council show.
Homeowners aged 55 and over unlocked the equivalent of over £5m of property wealth a day from July to September.
The number of new equity release plans exceeded 6,000 for the first time since Q4 2008 and lending via drawdown products rose 18% year on year to reach a new high.
There were 6,049 new plans taken out in Q3 2015, representing a 12% increase on Q2 and the first time this measure has exceeded 6,000 since Q4 2008. The volume of new plans in Q3 was up 9% year-on-year: the strongest figure of 2015 to date, compared with 3% annual growth in Q2 and 2% in Q1.
Nigel Waterson, chairman of the Equity Release Council, says: “Appetite among over-55 homeowners for tapping into their housing wealth continues to grow. There is increasing awareness that equity release can offer many benefits in later life by providing people with extra income or the means to meet other costs and expenses.
“The months ahead will see important discussions with regulators and government about how to build on this foundation, so that where there is a need, more people can make use of what is often their biggest source of retirement wealth.
“New arrivals in the sector and additions to the product range are helping more people to find options that suit their needs and circumstances.”
Dean Mirfin, technical director at Key Retirement adds: “ The figures announced today show that the sustained growth we have seen throughout 2015 shows little sign of wavering as we enter the final quarter of the year. “With both HM Treasury and the regulator now throwing the spotlight on ways that consumers can better access and utilise wealth locked up in property, we expect this growth to continue in to 2016 and beyond.
“With the average amount released from properties so far this year approaching three times the average defined contribution pension pot the need to utilise property wealth and the direct positive impact that it can have on retirement finances cannot be understated.”