Home improvements are driving activity in the equity release market with half of home owners using it to fund home improvements; and a falling number using it to pay off debts.
The use of equity release to support quality-of-life spending and family priorities is increasing according to Legal and General (L&G), with far fewer turning to it to pay off debts.
One in five customers (18%) are using their property wealth to support other family members in the form of a financial gift. The proportion of new customers turning to their property wealth to repay an existing mortgage has dropped from 31% to 19% of applications between H1 2024 and H1 2025. Similarly, the number using it to clear other debts, such as loans or credit cards, has also fallen (25% to 23%).
Commenting on their latest research Mike Batty, Product & Proposition Director, Home Finance, L&G: said
“Property wealth continues to be a useful tool for homeowners looking to fund later life and help achieve longer term goals. It’s encouraging to see people turning to the money tied up in bricks and mortar to improve their quality of life. As a lender, we continue to work with advisers and the wider industry to ensure the best outcomes for people looking to benefit from accessing their property wealth. While not suitable for everyone, lifetime mortgage solutions can be an important consideration as part of a holistic approach to financial planning.”
The research follows a survey by L&G which identified almost half of millennials don’t have a retirement plan in place; the survey found just 12% of respondents currently having no money saved for when they retire, while 36% don’t know what their monthly pension contributions are.
The research chimes with insight from Just Group whose consumer insight programme identified just one in five baby boomers said leaving an inheritance was one of their top five retirement goals; Spending more time with family and friends was the top objective, followed by travelling and pursuing new hobbies.
