• February 27, 2024
 Over half of Equity Release in 2023 used for home improvements, report finds

Over half of Equity Release in 2023 used for home improvements, report finds

New data from Legal & General Home Finance shows that home improvements continued to be the primary reason that new equity release customers took out a lifetime mortgage last year (51%).

Customers often used their lump sum to invest in improving their forever home. This includes adaptations to make sure a property remains suitable into retirement, alongside other types of home improvements. Analysis of English Housing Survey data by the Centre for Ageing Better suggests that 91% of homes across the country do not provide basic accessibility features, which presents particular challenges as people age2.

In addition to home improvements, customers took out lifetime mortgages to help get their finances in order. This includes debt consolidation (21%) and paying off mortgages (26%). Customers taking additional drawdowns, however, were more likely to use the value from within their homes to help supplement their income (23%). Craig Brown, CEO, Legal & General Home Finance, said:

“Property wealth can be a valuable asset and, looking at the new customers who came to us last year, we can see that home improvements continue to be the most popular use of equity release, helping people to improve rather than move.

As we look ahead to the rest of 2024, we anticipate a renewed interest in lifetime mortgages as customers reconsider using property wealth as the market likely stabilises. It’s worth bearing in mind that house prices are still significantly higher than pre-pandemic figures (18% up from the end of 2019), so property still represents an important asset which homeowners are increasingly likely to draw on3.

We’re also seeing more innovation in the market, bringing a greater range of products, like our new payment term lifetime mortgage, to give a broader range of solutions to a wider pool of customers.”

What’s more, recent research also revealed that while the over 45s are less concerned about equity release in general, there are significant gender differences around perceptions of equity release in the UK. The second edition of its Lightbulb Moments report found that men in the UK (58%) are more comfortable than women (43%) about taking out equity release.

Concerns around releasing equity in their home also have gender differences; 37% of women reported concern about losing their home, a worry that only 20% of men felt. Additionally, women were more likely to worry about inheritance (30% vs. 18%) and interest building up (27% vs. 23%).

A higher proportion of women (30%) spoke to family and friends to understand their views on releasing equity from their home in comparison to men (20%). Before speaking with an adviser, a considerable amount of women (30%) were concerned that equity release could impact or stop them from leaving an inheritance, almost double that of men (18%). Anticipating potential concerns is a key part of an adviser’s role, as is providing guidance to ensure their customers make informed decisions.

Katie Johnson, Digital Journalist, Today's Media

Digital Journalist, Today's Media Contact: katie.johnson@todaysmedia.co.uk LinkedIn