Equity release enquiries more than double post-pandemic

Specialist equity release and lifetime mortgage brokers, KIS Finance says that it has seen enquiries for equity release increase by 110% when comparing the first half of 2019 to the first half of 2021.

The company’s analysis indicated that the number of enquiries for equity release and lifetime mortgages was steady throughout 2019, then increased quickly during the second half of 2020 and throughout 2021 so far.

The analysis showed that the main reasons that customers gave for taking out a lifetime mortgage were:

• Supplementing income – 36%
• Offering financial support to children/grandchildren – 30%
• Making home improvements – 18%
• Other – 16%

In addition to the reasons above, 38% of these applicants used the funds raised from equity release to clear existing mortgage facilities before receiving the proceeds from their new lifetime mortgage.

Holly Andrews, Managing Director at KIS Finance, said “It’s been very interesting to see how the enquiries for equity release have grown over the last couple of years, and especially during the last few months.”

“The pandemic has clearly had an impact on many people’s income and significant numbers have turned to equity release as a way of accessing financial support for both themselves, and for family.

“36% of customers turned to equity release to support their income, and this includes people who are still working as well as  those who are retired and receiving a pension.”

“According to the ONS Coronavirus Job Retention Scheme statistics the  65 and over age group had the highest number of furloughed employees at the end of June, followed by those aged 55 to 64. This will be a leading factor as to why so many are turning to other options rather than potentially dipping into savings or pension pots early. When the furlough scheme ends in September, we are expecting to see a new wave of redundancies which could potentially find a lot of people in their 50s and 60s unemployed and struggling to find work.”

“This in turn could lead to another surge in lifetime mortgage enquiries as more and more seek financial support.”

“It’s also interesting to see that a very significant number (31%) of customers are using the equity in their homes to offer financial support to their children or grandchildren. Talking to our customers has revealed that the majority are doing this to help their children/grandchildren to put down house deposits.”

Giving beneficiaries an early inheritance has always been a common use for equity release, but this has been even more prevalent over the last year.”