Record Quarter 1 for Equity Release!
Total lending through equity release in the first quarter of 2015 was £325.7m representing a 3% increase year on year, meanwhile there were nearly 5,000 new customers in the quarter – a 2% increase from Quarter 1 2014. The average equity release withdrawal now exceeds £66,500 – up 4% from Q4 2014 – recently it has been reported that on average a pensioner needs £11,200 per year to finance a basic standard of living.
Opinions are mixed as to the main drivers for this record breaking activity but undoubtedly the ‘interest-only time bomb’ has played a part along with increasing restrictions on lending into retirement. Increasingly with higher property prices the older generation are withdrawing equity to help their children get a foothold on the property ladder whilst others find they need funds to pay for help at home or other forms of care. The increases in equity release have continued unabated despite the introduction of the new pension freedoms. Indeed many in the sector believe that the inevitable consequence of these new pension freedoms and the government guidance that has also been introduced will be a gradual increase in equity release as people plan their finances for retirement.
Richard Espley Head of Equity Release commented:
“The equity release market continues to go from strength to strength as people nearing or in retirement find that their finances are stretched to the limit or that family members are similarly stretched and require a financial boost.
“For many older people the opportunity to release property equity provides the chance for a comfortable retirement for themselves or an end to financial hardship for family members. As specialist equity release lawyers we’ve seen a steady increase in business over recent months and expect that trend to continue.”
Content correct at time of publication