Equity release borrowing has doubled in five years

Homeowners borrowed £6.2 billion against the value of their properties through equity release in 2022, with this marking a 29% increase on 2021’s total latest Equity Release Council figures have indicated.

The figures show that the total has more than doubled in size since 2017, when £3.06 billon was released. The number of owners who chose to release wealth from their properties hit 93,421 in 2022 (a record year for activity) showing a 23% year-on-year increase.

The number of new equity release plans taken out was up by a fifth to 50,000. While the amount of money borrowed via equity release jumped in 2022, the number of plans agreed in Quarter 4 fell 17% from the previous quarter amid an increase in interest rates. 

David Burrowes, Chairman of the Equity Release Council, said “We saw a glimpse of the equity release market’s potential in 2022 as it returned to its previous growth path* with a growing customer base making use of improved products and added protections. In a climate where retirement incomes have to stretch further for longer**, property wealth is as important to many people’s financial wellbeing as their pension.”

“The unmet needs of the UK’s ageing population have seen the equity release market double in size since 2017, channelling decades of experience in helping older homeowners to gain financial freedom. Today’s equity release customers are more in control of their costs than ever before, with the right to make voluntary penalty-free partial repayments and the option of fixed early repayment charges which reduce to 0% over time.”

“Factors outside the industry’s control meant 2022 ended on an unusually quiet note in December, after the mini-Budget fuelled rate rises and tightening criteria. However, releasing equity is not a choice to make on a whim, and we are encouraged by signs that customers are pausing to assess their options. Seeking informed financial advice and independent legal advice from firms who sign up to Council standards is essential at the best of times, and more so now than ever.”

“While some consumers may delay a decision about unlocking property wealth in 2023, many people will find that releasing equity is an appealing and essential step to move ahead with their lives and support their families’ needs.”