The total value of equity release lending has grown another 21% in the first quarter of 2016 to £393.9 million – the highest quarter on record. As a whole the market was worth a huge £1.7 billion in 2015, up 24% on the year before.
According to the Equity Release Council, this is the highest amount ever recorded as home owners make use of their housing wealth to supplement their monthly income, make home improvements, support younger family members with buying a property or pay for the trip of a lifetime.
Drawdown lifetime mortgages are still the most popular product , representing 67% of the 5,175 equity release plans taken out. Lump sum mortgages made up around 33% with the number of home reversion plans small enough to be lost in rounding. Q1 was also the first quarter since 2009 that the number of plans topped 5,000.
2016 is the 25th year equity release lending has existed. Nigel Waterson, Chairman of the Equity Release Council said: “These latest figures represent a strong start to the year for the equity release market, and place housing wealth centre stage in financial planning for later-life. In a year that marks the milestone of 25 years of safe equity release, the market is continuing to build on the momentum of recent years.
“The recent decision from the FCA to reduce affordability assessments for Lifetime Mortgages is a positive development that will help more people benefit from all that equity release has to offer. For a generation that are often asset rich – cash poor, their home is likely to be their greatest asset and should form part of everyone’s planning for retirement.
“As we look forward to the next 25 years, it is important now to maintain expert adviser support for customers as the sector grows, as well as continuing to innovate to satisfy customer demand, all the while preserving standards and consumer protections.”