The equity release market is continuing to expand following 2021’s return to growth, with the latest research from the Equity Release Council (ERC) showing a further increases in the number of equity release customers in the Q1 2022.
23,395 new and returning customers withdrew equity from their property during the first quarter – a new record. 12,174 new plans were agreed, which represents a 21% increase from this time last year. Drawdown lifetime mortgages proved the most popular, with 54% of customers withdrawing equity using this method.
This increase in customers culminated in a total of £1.53 billion being withdrawn from property in Q1, a striking 14% increase from Q4 2022 (£1.34 billion). The average first instalment of a drawdown lifetime mortgage product was £94,215, an increase of 5% over the last year. The average lump sum withdrawal rose 7% to £131,781 in the same period.
This comes as the ERC reported earlier this year that the equity release market is now six times bigger than it was in 2010.
David Burrowes, chair of the Equity Release Council, commented:
“The popularity of equity release so far this year is the natural result of modern products offering greater flexibility and a property market where growth has far outstripped inflation, alongside an ageing population.
After two years where customer numbers have been subdued by the pandemic, realising gains from rising house prices can make a major difference to people’s quality of life.
Not only are more people considering equity release, but they are doing so for many different reasons and helping old and young alike to fund everyday costs and major life events.
Innovation has made equity release products more adaptable to customers’ changing circumstances. Our standards mean lifetime mortgages remain the most secure type of retirement home finance, with customers protected from interest rate rises, repossession and passing on debt due to negative equity.
However, it remains vital that decisions are carefully considered through both a long-term and short-term lens, with family input wherever possible and with financial and legal advice in every instance.”