The final quarter of 2017 saw annual lending hit a 15-year peak as equity release levels reached a record high.
According to the figures from the Equity Release Council, quarter 4 last year saw total lending via equity release plans reach £838 million, with the total amount of cask unlocked by homeowners aged over 55 hit £3.06 billion in 2017. This is the first time the figure has surpassed £3 billion in a single year.
Also setting a new record was the number of people releasing equity in a quarter, with the Q4 figure exceeding 10,000 for the first time.
As a result, the total number of newly agreed equity release plans was up by over a third (34%) on the previous year to 37,037. This is the greatest rise in percentage since 2003.
Over the course of the year, 67,000 customers were supported by the sector, with drawdown lifetime mortgages continuing to be the most popular product. In Q4 alone, they represented 75% of agreed plans – up from 2016’s proportion of 64%.
Commenting on the figures was David Burrowes. The Chairman of the Equity Release Council drew attention to the changing nature of financial planning as well as wider range of products available to consumers.
“The record-breaking demand for equity release over the past year is testament to the fact more consumers are changing the way they plan financially for retirement, and taking a broader range of options into consideration. This is illustrated by the continued popularity of drawdown products, with many customers viewing equity release as a reliable source of income in later life.
“Importantly, the evolving mindset of consumers is helped by the flexibility to use housing wealth for a range of purposes, and the rigorous safeguards and customer protections in place across the market. Consumers also have more choice than ever before – driven by the increasing number of providers that has, in turn, increased the range of product options and helped to push interest rates to new lows.
“Property is, for many people, their largest asset and has the potential to play an ever-greater role in the future to meet the challenge of ensuring effective later life funding. I look forward to working with our members and industry, regulators and government across 2018 to build on what has been a breakthrough year for the sector.”
