Equity release market doubles in size over past five years

Total lending through equity release last year increased by almost 30% compared to 2021.  

The equity release market has doubled in size over the past five years, according to the Equity Release Council, the industry’s official trade body. Last year annual lending reached £6.2 billion compared to the £3.06 billion reached in 2017.

This is partly due to “increased product flexibility and choice”, according to Will Hale, CEO at Key Later Life Finance, an equity release provider.

He listed the no-negative equity guarantee as an example of how such products have become more flexible over the past five years.

The no-negative equity guarantee is a feature which ensures that borrowers will never owe more than what the property is worth when it is sold. If an equity release product is to meet the Equity Release Council’s Product Standards, this must be included.

Meanwhile, the amount lent through equity release last year was particularly high. Compared to 2021, total lending was up by nearly 30%.  

This is despite a quiet month in December, which was due to “factors outside the industry’s control”, according to David Burrowes, Chairman of the Equity Release Council.

In particular, he referred to September’s mini-Budget which fuelled rate rises in the sector.

“Equity release is not suitable in all situations,” Hale noted.

It is a line which was echoed by Burrowes, who encouraged potential borrowers to seek independent, professional advice.

Our preferred equity release advisers are Mortgage Advice Bureau Later Life.

Moneyfactscompare.co.uk readers who choose Mortgage Advice Bureau Later Life as their equity release brokers can expect a personalised, full fact-find of their finances to understand their situation.

Once completed, the review will explore alternatives to equity release to see if these might better meet the needs of the customer. If equity release is suitable, Mortgage Advice Bureau Later Life will make applicable recommendations to its customer.