Over-55s took advantage of the stamp duty holiday driving a 116% jump in the number of people using equity release to buy a property this year, according to More2life.
The equity release lender says its data also shows there was a 113% uplift in the amount of equity used to fund house purchases in the eight months to August, compared to a year ago.
It says: “This dramatic increase coincides with the introduction of the stamp duty land tax holiday in July 2020 and highlights how over-55s are increasingly using equity release to help them move home – often to be close to family, friends or amenities.”
The lender says the average property purchased with the support of equity release was £362,742, which is slightly higher than the average for all properties, £355,155, and the amount of release at £91,603, was also higher at £85,541.
More2life chief executive Dave Harris says: “It’s clear from these figures that the stamp duty holiday proved to be an opportunity for retirees looking to purchase their forever homes, and that many of them have turned to equity release to boost their buying power.
“The dramatic rise in equity release used for property purchases since the first half of 2020 highlights how unlocking property wealth is a viable solution to help retirees obtain the home they desire, whether that’s to meet their changing needs in retirement or to move closer to family and friends.
“While the tapered stamp duty holiday might be coming to an end soon, equity release will remain a valuable tool for over-55s looking to purchase their dream home.
“However, there is still much education that needs to be done as many consumers and even some advisers don’t realise that this is a viable way of funding a house move.
“Advisers have a key role to play in alerting clients to this option and then helping to guide them through the process.”
On 1 July, the stamp duty nil-rate threshold was reduced from £500,000 to £250,000 until the end of September.
From 1 October, the threshold will return to £125,000 – or £300,000 for first-time buyers purchasing a property worth up to £500,000.
Original Article from Mortgage Strategy 01/09/21