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Pensioners release £6.8 million property wealth a day

15 October 2016

  • Record post-Brexit quarter puts equity release market on track for new all-time high
  • Plan sales and property wealth released rise by a third, www.keyadvice.co.uk’s Q3 Equity Release Market Monitor shows
 
Download the full report at: www.keyadvice.co.uk/about/market-monitor
 
Retired homeowners withdrew more than £6.8 million of property wealth a day as the equity release market surged to a new high shrugging off any fears about the EU Referendum vote, according to new analysis from leading over-55s finance specialist www.keyadvice.co.uk.
 
Total sales for the first nine months of the year are already at 92% of the total achieved in the whole of 2015 – which was itself an all-time high, Key’s Q3 Equity Release Market Monitor shows.
 
More than £1.58 billion of property wealth has been released in the nine months to October compared with £1.71 billion in the whole of 2015 with the past three months recording strong growth.
 
The number of homeowners using property wealth to enhance retirement living increased 33% in the three months to September 30th compared with the same period last year while the total amount released grew by 35%.
 
Customers released £633.8 million of property wealth in the third quarter with 8,348 customers taking out plans compared with £470.9 million released in the same period of 2015 by 6,297 customers.
 
Homeowners gained an average £75,900 each by using equity release underlining the confidence in using property wealth for retirement planning. The detailed findings show wide variations around the country with Londoners releasing £135,886 compared with £44,830 in Northern Ireland.
 
Key’s Equity Release Market Monitor, which analyses data for Equity Release Council members and non-members, shows the growth in amounts being released is enabling homeowners to address a wider range of financial issues.
 
Around 82% of customers used some or all of the cash for home or garden improvements compared with 61% in the same period last year while 41% cleared credit card and loan debts compared with 30% last year. Around a third (34%) funded holidays in the past three months while 21% paid off mortgages.
 
Dean Mirfin, technical director at Key (www.keyadvice.com), said:  
“The equity release market has already almost matched the record performance of 2015 in just nine months highlighting how property wealth is enhancing retirement planning as other retirement income solutions are squeezed by historically low gilt and interest rates.
 
“The growth in the average amount released by retired homeowners is making a major difference to lifestyles with the detailed breakdown showing how most are using the cash to improve their homes while also being able to pay off debts and boost income.
 
“The market is on course for another record year with rate cuts for loans and new providers entering the market providing further momentum. The results also show that demand for tapping into housing equity is very much increasing throughout the UK with most regions recording record growth in plan numbers and total lending.”
 
Across the country nine out of 12 regions saw growth in the value of property wealth released with the West Midlands recording a 67% rise, East Midlands recording a 50% rise, and London a 48% increase. The only area to record a substantial fall was Scotland with an 18% decrease while Northern Ireland and the North West were virtually unchanged.
 
The biggest growth in plan sales was recorded in the West Midlands where total sales rose 59% followed by the East Midlands on 54% and East Anglia on 53%. Only Scotland reported a drop – sales were down 13% - while Northern Ireland and the North West were effectively unchanged.
 
Region Number of plans sold Q3 2016 Number of plans sold Q3 2015 Total value released Q3 2016 (£ million) Total value released Q3 2015  (£ million)
South East 2,302 1,628 £195,535,737 £141,969,635
London 957 669 £130,094,578 £87,636,938
South West 1,026 721 £75,985,792 £54,749,646
North West 702 724 £38,056,004 £38,998,806
East Anglia 544 355 £40,749,820 £27,654,035
East Midlands 679 441 £37,930,322 £25,354,608
West Midlands 620 390 £34,862,614 £20,905,460
Scotland 449 517 £23,883,680 £29,282,261
   Yorkshire & Humberside 479 376 £25,386,209 £17,234,733
Wales 311 228 £17,322,169 £13,403,516
North East 213 183 £11,041,682 £10,719,302
Northern Ireland 66 66 £2,910,169 £2,996,933
UK 8,348 6,297 £633,758,238 £470,905,872
 
Around 63% of all sales were drawdown plans, including enhanced drawdown which offers enhanced terms to people with health or lifestyle conditions, compared with 36% from lump sum single advance lifetime mortgages including enhanced products.
 
Download the full report at: www.keyadvice.co.uk/about/market-monitor
 
Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6027 or visiting www.keyadvice.co.uk/equity-release/request-a-free-guide

Page last updated: Tuesday 13 August 2019