Older homeowners releases £1.94 billion in equity during the first six months of the year as the equity release market continued its lockdown recovery, according to new data from Key.
The value of new equity released increased by 32% over the same period last year as new plan sales rose by 3% to 20,445. The total value of equity released was also higher than the £1.68 billion released in the first half of 2019.
The average amount of equity customers are releasing increased from £72,340 in H1 2020 to £94,982.
More than half of the proceeds of equity release were used to clear mortgages (52%) while 23% was used to help family and friends – notably for help with house deposits as buyers rushed to beat the end of the stamp duty holiday.
The data revealed an increase in the amount of money used for property purchases – around 7% of the total value released went towards buying homes with the average customer taking out £115,068 to boost their buying power.
Will Hale, CEO at Key, said: “The equity release market is benefiting from the success of the vaccination programme putting the country back on the delayed road to recovery with total value released up strongly and the number of plans taken out increasing.
“Big ticket items like repaying outstanding mortgages, managing unsecured debt and helping family members get their foot on the property ladder is what motivates customers. This is intergenerational fairness in action and equity release customers provided almost £1 million per day in deposits during the stamp duty holiday.
“Drawdown plans remain dominant and with over 710 different products on the market, those who choose equity release to manage their borrowing benefit from more flexibility than ever – including the opportunity to make ongoing interest and fee free capital repayments.”
Original Article from Financial Reporter 16/07/21