Equity release has been enjoying a surge of popularity in recent years, thanks in no small part to rising house prices, which have allowed homeowners to benefit from a boost in equity that can be used to help fund their retirement. Unsurprisingly, a growing number of people are taking advantage, with new figures showing that the market is already on course for a record-breaking year.
The figures, from Keyretirement.com, show that retired homeowners withdrew more than £6.8m of property wealth a day between July and September, with the market surging to a new high. Customers released a total of £633.8m of property wealth during the three-month period, with 8,348 customers taking out plans; this is compared with the £470.9m released in the same period of 2015 by 6,297 customers, highlighting the level of growth in the market.
It also means that the total for the first nine months of the year so far stands at over £1.58bn, with total sales already at 92% of the total achieved in the whole of 2015 (£1.71bn) – which was itself an all-time high.
Homeowners gained an average £75,900 each by using equity release, and many are putting that cash injection to excellent use. For example, around 82% of customers used some or all of the cash for home or garden improvements in the three months to the end of September (compared with 61% last year), while 41% cleared credit card and loan debts (up from 30%), 34% funded holidays and 21% paid off mortgages.
Overall, the number of homeowners using property wealth to enhance their retirement living increased 33% during the period, with customers using equity release to address a wider range of financial issues.
"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," said Dean Mirfin of Key Retirement.
"The growth in the average amount released by retired homeowners is making a major difference to lifestyles, with most 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."
If you're thinking of turning to equity release to help fund your retirement, find out more about it by reading our guide, and talk to a specialist through our no obligation equity release planning service to see if it could be an option.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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