The number of borrowers releasing equity from their homes has neared pre-pandemic levels in the second quarter of this year, according to the latest figures from the Equity Release Council (ERC).
There were 20,352 new and returning customers in the market between April and June, a rise from 16,527 in Q1 2021 and 13,617 in Q2 2020.
Over-55 homeowners accessed £1.17bn of property wealth in Q2 2021, up 2% from £1.14bn in Q1 2021 and up 67% year-on-year from Q2 2020 during the first Covid-19 lockdown.
Drawdown lifetime mortgages were the most common type of new plan agreed (55%), while returning drawdown customers, the most subdued part of the market during the pandemic, saw numbers rise 67%.
Equity release council chairman David Burrowes says: “Judging by these latest figures, the equity release market is showing signs of stability and durability as the option to access property wealth opens doors for thousands of people to pursue their financial goals.
“We were accustomed to more than 20,000 new or returning customers releasing equity each quarter in the two years before Covid-19 struck. We’re now seeing activity levels steadily returning to that status quo, with some existing customers returning to make withdrawals that were put on hold last year. The gradual recovery suggests people are carefully weighing up their circumstances and long-term needs, helped by specialist financial and legal advice, with speculation about a spike of activity during the pandemic so far proving unfounded.
“The steady recovery has been helped by confidence in the wider property market, where house price gains over the last year have given many homeowners more equity at their disposal. Equity release has become a socially important means for one generation to help another, as well as meeting later life financial needs. June’s Stamp Duty deadline will have prompted some older homeowners to pass on a ‘living inheritance’ so that younger family members can climb the property ladder.”
Original Article from Mortgage Strategy 29/07/21