Data released by Key Retirement Solutions last week shows an increase in consumer confidence in the use of equity release.
The Equity Release Market Monitor shows a record 27 per cent increase in the average amount of equity released during the first quarter. The first quarter of 2013 saw consumers release £56,710, up on £44,519 released in the same period of 2012.
Across the market funds released increased 21 per cent, from just over £217 million to £263 million.
The most popular uses of funds released were for home and garden improvements but consumers using the funds to settle their mortgage rose 4 per cent, from 17 per cent to 21 per cent. It is entirely possible that this figure could increase significantly as more consumers realise that this could be a way out of the looming “interest only” crisis.
Dean Mirfin, Group Director at Key Retirement Solutions, said:
“The increased use of lump sum lifetime mortgages is significant as it shows the growing confidence in using property wealth and success for ongoing innovation, higher advances are increasingly needed to help clear outstanding mortgages.”
“Equity release has a major role to play in tackling the issue of funding interest-only mortgages into retirement. The launch of plans enabling clients to continue to pay interest and at any time switch to roll up interest has boosted use of lifetime mortgage plans and there is more innovation to come.”