New figures reveal that retired homeowners released an average of £9.5 million per day of their equity in the first half of 2018, resulting in a total for the six months of £1.71 billion. This is according to Key Retirement, which further reported that the record expansion marks an increase of 37% on the previous year.
Homeowners over 55 who used equity release in the first half of the year received an average of almost £78,000 each. The majority used this to make home or garden improvements (63%), followed by 33% who used the freed-up equity to pay for holidays. Family members weren't left out, either, with 28% gifting some or all of the money, up from 23% a year earlier.
It wasn't just more money that helped the half-year period stand out, with equity release plan sales standing at 22,816, a 29% rise from 17,656 sales in the first six months of 2017. "Customer demand is driving the expansion in the market to new record highs enabling more retired homeowners to transform their finances," said Dean Mirfin, chief product officer at Key Retirement. "More money was released in the first six months of 2018 than in the whole of 2015 as records continue to be broken across the market, with expert independent advisers playing a vital role."
Most of the sales (57%) were for drawdown plans, which allow people to take out the money in stages and thereby reduce the interest they are charged compared to a lump sum lifetime mortgage, which 43% took out. For anyone considering equity release, there are also enhanced products to consider for those with health or lifestyle conditions, which encompassed 13% of drawdown and 16% of lump sum sales between January and June.
As equity release becomes more and more popular and mainstream, more options become available. That's why it's so important to consult an adviser before jumping in, and to keep your family in the loop as well. For more information, we have a dedicated equity release page that shows not just plans, but also answers to some of the most commonly asked questions.
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 Any products featured may be withdrawn by their provider or changed at any time.