Equity release activity up 11 per cent
Equity release has increased 11 per cent in the third quarter of the year. It has also seen a 21 per cent jump against the same period last year.
Total advances of £248.9m were recorded during July to September 2012 compared to £224.8m in April to June 2012 and £209.1m in Q3 2011. This is the largest amount of equity released since the last three months of 2008 (£274.1m).
The number of equity release plans also increased in the penultimate quarter of the year from 4302 to 4777.
Unsurprisingly drawdown mortgages, which allow the policy holder to withdraw equity from a cash reserve, remain the most popular plan. However lump sum mortgages increased 3 per cent, suggesting homeowners are using equity release to repay debt and help younger generations raise the deposit to get on the property ladder.
Director General of the Equity Release Council, Andrea Rozario, is optimistic about the latest figures:
“Q3 is traditionally one of the strongest quarters in the equity release calendar and today’s figures highlight the fact that the market is firmly back on track for sustained growth. If we see more that £200m worth of equity released in Q4 – something that we are on track to do – then this year we will out-perform both 2011 and 2010.
“This indicates a renewed consumer interest in these products and is excellent news for the market – as we as The Council. All the signs support the fact that people will need to factor in their housing equity when they plan for their retirement and the recent upsurge suggests this message is being heard.”
Content correct at time of publication