Homeowners set to access more than £4bn of property wealth this year

26th October 2021

Homeowners are set to access more than £4 billion of property wealth this year via equity release for the first time on record according to latest figures from the Equity Release Council.

Latest analysis from the Council found that over-55 homeowners unlocked £1.15 billion of property wealth via equity release during Q3 2021, down 2% from Q2 (£1.17 billion) but up 19% (£963m) compared with Q3 2020 as the UK was emerging from the first wave of the pandemic

New and returning customers have accessed £3.46 billion so far in 2021 – surpassing previous years and putting the market on track for over £4 billion of activity this year whilst fewer customers access drawdown funds in Q3, but new plans and further advances both saw growth

Average new lump sum plans reduced from £129,558 in Q2 to £121,464 in Q3 as the first Stamp Duty holiday deadline passes, while the average new drawdown plan size is unchanged.

David Burrowes, Chairman of the Equity Release Council, said “The equity release market has been a steady ship in turbulent times with activity broadly stable now for four successive quarters. The inevitable pandemic slowdown has been followed by the gradual return of confidence, helped by the robust performance of the wider property market. “While annual activity has hovered close to £4 billion since 2018, the market hasn’t stood still and the available product range has more than doubled since then. Homeowners in need of extra funds for later life are increasingly looking to equity release as a positive step, in the right circumstances, to benefit from a source of wealth they have built up over many decades.’

“The Stamp Duty holiday inevitably impacted consumer behaviour over the summer and into autumn, with average loan sizes and drawdown activity fluctuating. Looking ahead, the ability to gift money to family members and share the proceeds of long-term house price growth is likely to remain an attractive option. Equity release can both help to close the financial gap between generations and allow people in later life to experience and enjoy the benefits of providing a living inheritance.”

Commenting on the figures, Will Hale, CEO at independent equity release adviser Key said: “The Equity Release Council’s figures highlight the growing confidence older homeowners have in using property wealth as part of financial planning with the market set for a record year.”

“We’ve already seen a record four consecutive quarters with more than £1 billion lent to new and existing customers in each of these quarters which underlines the strong demand even in the face of the COVID-19 pandemic and economic uncertainty.”

“The Stamp Duty Holiday has definitely been a factor as well as the strength of the housing market but underpinning it all is the commitment to innovation by lenders which is playing a crucial role by offering more flexible options to support advisers and their customers.”

“With Q4 a traditionally strong period for this sector and a certain amount of pent-up demand due to pandemic restrictions, the market looks on track to finish strongly in 2021 – potentially edging over the £4.5 billion mark.”

“Borrowing into later life is a simple fact of modern day society and this focus on providing customers with the products they want and need is helping to cement their role in later life financial planning.”