It's little wonder that the equity release market is booming, what with rising house prices allowing older homeowners to benefit from a significant boost in equity, and with growing numbers potentially facing pension poverty it couldn't come at a better time. Happily, providers are accommodating this rising demand, as competition continues to surge.
Latest figures from the Equity Release Council show that the number of product options has grown significantly in the past decade, with a total of 78 products currently available from Council members. This is up from 24 in 2007, and equates to a rise of 225% in the last 10 years; add to that the increase of 34% (or 20 products) in the last year alone, and customers have plenty of options as well as far greater flexibility compared with years gone by.
This rapid expansion comes alongside growth in the wider market, with total equity release lending reaching a record of almost £1.4 billion in H1 2017, up from £0.9 billion in H1 2016. If this trend continues, the Equity Release Council predicts that annual lending will reach £3 billion for the first time in 2017, a far cry from 10 years ago, when annual lending totalled just £1.2 billion.
Borrowers can also benefit from greater flexibility, with the rise in product choice accompanying a rise in innovation. Some recent innovative features include:
The level of innovation is going hand in hand with rising competition as providers seek to compete for your business, and that's having a knock-on effect on interest rates.
Indeed, Moneyfacts' figures show that the average lifetime equity release rate (including both fixed and variable deals) hit a record low of 5.19% in August, down from 5.38% at the start of the year and a significant drop from 5.76% in August 2016, while the average fixed rate fell to 5.51%, another record low and well below both January's rate of 5.72% and August 2016's average of 6.15%.
Both rates have edged up in recent weeks, but by minimal amounts, so they're still among some of the lowest recorded. This all means that equity release borrowers have never had it better, so what are you waiting for? Equity release could be a great way to free up cash for retirement, so contact our no obligation equity release consultation service to see if it could be worth considering.
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 Any products featured may be withdrawn by their provider or changed at any time.