How many equity release mortgages were taken out last year?

Over 37,000 equity release schemes were taken out in 2019 as a way for homeowners to earn income from their existing properties.

The average household released £62,500 from their home, but figures show that this amount later raise to £80,000 per household. Most households receive one lump sum as a way to supplement their income or put towards an important lifestyle purchase or occasion.

Across the country, it is estimated that around 450,000 equity release plans have been taken out since the records first began back in 1992. In the data that has been released by the trade body for the equity release sector, the Equity Release Council, more than half of these equity release customers have unlocked cash from their property in the past decade alone, accounting for approximately 249,000 new customers.

Equity release statistics

Growth in the equity release market

In the most recent figures from the Equity Release Council, the equity release market has more than doubled in just the space of two years alone from 2016 to 2018.

It is estimated that homeowners who are over the age of 55 released around £870 million in total from their properties in the first quarter of 2018, which is a whopping increase of 120% from £394 million in the first quarter of 2016.

Rise in new customers

The same data shows that there has been a paralleled growth in new customer numbers for equity release products too. These have also doubled over the same period of time, rising from 5,175 in 2016 to now well over 10,195 for 2018, which is indicative of a rise of over 97%.

On average, it was estimated that older homeowners across the country unlocked approximately £10 million (£9.7 million) in housing wealth each and every day from January up to March 2018. Again, this number had more than doubled compared to 2016 for the same period, which was around £4.3 million in total

Equity release number set to increase

In the years to come, it is believed that the number of people who release equity from their property will continue to grow. In a report recently conducted by the Intermediary Mortgage Lenders Association (IMLA) the percentage of homeowners over 65 has increased by over 52 percent in just two decades. This is considered to be double the growth rate in the UK of the over 65’s population. As a result of these statistics, and the country’s ageing population, equity release numbers are anticipated to continue rising.

What is causing this trend?

Why has opting for an equity release mortgage become such a popular option in recent years among the over 55s? Experts in the field believe that it is for a number of different reasons.

More product options

Customers looking at releasing cash in their homes increasingly have a number of different product options to choose from, making equity release a far more attractive option than perhaps in previous years. In the Equity Release Council Autumn 2018 Market report, it has been reported that there are now approximately 139 different equity release product options available, which is a rise from the last recorded amount of 58 in 2016.

What’s more, over 70% of these product options give customers much more flexibility over their equity release product. Over two-thirds of products enable homeowners to make repayments on an ad-hoc basis, as well as penalty-free voluntary payments, or just partial repayments if they so wish. The impact of these new flexible products has been a rise in customers purchasing equity release mortgages.

Stay in their homes

Another factor that has led to significant growth in the equity release mortgage industry is that more and more retirees are looking to stay in their homes once they reach retirement age. As care costs continue to increase, and with many having more money locked up in their home than in their pension, seeking to release some of this cash through a lump sum has become an increasingly appealing option.

Helping family members

Other reasons that people have chosen to use equity release includes helping family members. In the most recent government figures the number of households in England who had purchased a property through a gift or a loan from family or friends had reached a post 2007-8 high of 1.1 million in total. As a result of this growth in intergenerational lending, the number of people who are taking out equity release products has also increased.

Is equity release right for me?

It is important to assess your needs in order to decide if equity release is the right product for you. Nevertheless, with a much wider variety of flexible equity release products to choose from, it now provides a genuine retirement option and financial buffer for many homeowners across the country. For any further questions, please visit our FAQs or contact us directly at Equity Release Online.