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Equity release loans hit record £1.7bn

The Equity Release Council has announced that homeowners took out 13,452 new equity release plans in the third quarter with a record lending of £1.7bn.

Of the 25,519 customers between July and September, 9,648 were returning customers and 2,419 further advances. Furthermore, this type of loan reached 13,000 for the first time, 8% up on the previous quarter for property owners aged 55 or over.

Key chief executive Will Hale said: "While there is no doubt that we did see the market return to more normal post-pandemic trading conditions in the third quarter of this year, the political and economic turmoil over the last few weeks, has, like the mainstream mortgage sector, impacted the rates and loan- to-values available.

"However, the cost-of-living crisis has continued to bite, inflation has hit double digits, and older customers moving from fixed-rate mortgage deals to their lender's standard variable rate have been shocked by the difference.

"With over 65 homeowners sitting on an estimated £3trn of unmortgaged property wealth and four in five of the customers who progress to speaking to one of our advisers looking to address a financial need, there is clearly a key role for the sector to play in helping older customers navigate through the current economic challenges and still live a fulfilling later life."

Equity release gives access to a range of products, allowing you to release the equity (cash) tied up in your home if you are older. You can take the money you release as a lump sum, in several smaller amounts or as a combination. There are several reasons why clients are turning to equity release, including:

  • Fund a longer, more active retirement while enabling them to stay in their home

  • Take a holistic view of their wealth

  • Fund their children's home deposit

  • Pay off an existing interest-only mortgage or other debts

  • Allow a divorcee to stay in their home while paying half of their equity to their ex-spouse

  • Buy a second or holiday home

  • Provide tax-free cash

  • Adapt a home to cater for care needs

  • Pay for their grandchildren's school fees

  • Help to finance a better retirement

Donna Kerr, Greenshoots Financial Founder, added, "Many homeowners have built up a significant amount of equity in their homes, and there are several options available in equity release, whether gifting or using equity to finance home improvements. However, while the markets have settled, there remain challenges ahead, and customers considering borrowing must seek specialist advice and consider all their options. Our senior team undertake specialist training to deal with the complexities of equity release and the considerations when using this as part of a wider approach to retirement planning."

If you wish to discuss the opportunities for you with equity release, please get in touch. Our team are here to help our customers find the right option for their individual circumstances.


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