Equity release sees four-fold decade growth | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 04/02/2020

New figures show that although the amount borrowed through equity release has seen an almost four-fold increase in the last decade, 2019 saw little growth in the market.

The Equity Release Council published figures that showed the amount in property wealth accessed by older homeowners increased from £945.97m in 2009 to £3.92bn in 2019. However, despite this decade growth, last year saw the equity release market saturate, with lending volumes remaining largely unchanged since 2018 when £3.94bn was unlocked.

According to the Equity Release Council, increased consumer demand for equity release products is due to a number of factors, including homeowners recognising the role property wealth plays in supporting their retirement finances. In addition to this, it credits improved product features and flexibilities, such as the ability to make voluntary or partial repayments with no early repayment charge for helping to boost the popularity of the sector.

2019 equity release market

In October, we reported on figures released by the Equity Release Council that showed during July-September 2019, the market had seen a 6% increase in equity release activity compared to the previous three months. As well as this, according to the most recent figures released, the final three months of 2019 were the busiest period of the year, with over £1bn in property wealth being unlocked. This would suggest that although 2019 saw a slow start, the market began to pick up in the second half of the year.

Additionally, equity release customers were bolstered by a fall in interest rates during September, as the Autumn 2019 Market Report found that the average interest rate had dropped to a record low of 4.19% during the month, which the Equity Release Council stated was partly due to increased competition across the market.

Commenting on the figures, David Burrowes, chairman of the Equity Release Council, said: “After a period of steady growth, the market has reached a point of consolidation in 2019 with lending volumes in line with 2018. The sector enters 2020 in a strong position with updated standards and a greater number of diverse members signed up than ever before. Looking ahead, we’ll continue to work with stakeholders to ensure consumers are able to access the best advice while ensuring joined-up financial planning so that equity release remains a key consideration in mainstream retirement planning.

“Previously viewed as a niche product to support people’s retirement plans, the untapped potential of equity release is now being recognised. This comes as a growing number of customers are recognising the important role property wealth can play in meeting their retirement needs. This has been driven by competition, falling interest rates, increasing numbers of flexible and innovative product options and supported by rigorous standards in the market.”


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