Equity release “lifeline for pensioners”
According to recent research, the amount of equity released by homeowners during 2016 was nearly a third higher than 2015 (30%). The data from Responsible Equity Release indicated that the average loan size was £59,887.
Equity release plans are being taken out by more people than ever; the figures showed that the number of homeowners releasing equity last year had grown by 28%.
When comparing the number of equity release plans for Scotland, 2016’s figure was 53.6% higher than that of 2015. London also saw a significant rise in plans being taken out (45.7%), followed by the South West (32.7%) as well as the East of England (32.2%).
In comparison to 2015, homeowners in this region released £12,000 more equity on average in 2016, with this figure reaching £53,680. The previous year’s figure was £41,378.
The most amount of equity in 2016 was released by those in London. Up by 13% on 2015, the average loan in 2016 reached £122,678. This can be contrasted to Northern Ireland which saw the average homeowner release £32,275, the lowest amount.
The data also indicated that 36% are now taking out plans in order to clear mortgages.
Commenting on the figures was Steve Wilkie. The managing director of Responsible Equity Release highlighted the innovation of the industry in addition to the wider range of products on offer.
“The equity release market had a record 2016. The industry has innovated to appeal to a wider audience and more homeowners are using the equity in their homes for a host of reasons, from supplementing their retirement income, to providing lump sums to pay off mortgages and clearing debts.
“Equity release has provided an invaluable lifeline for thousands of pensioners who have found that their pension income is not sufficient to fund their retirements.
“The equity release industry has also been far more receptive to innovation, recognising the importance of meeting the changing demands of customers who are more aware of equity release but want more choice and flexibility.
“The greater variety of products, such as interest-only lifetime mortgages and flexible repayment, has attracted a whole new market to the benefits of equity release.”