May sees number of equity release plans up 10%
Recent figures show that the total amount of equity released in May 2018 was up 5.8% month-on-month.
According to Responsible Equity Release, the cumulative number of equity release plans taken out during the month was 10% higher than April 2018, with the general trend indicated that the market remained strong despite the housing market fluctuations.
However, it’s worth noting that the average amount of equity did decline month-on-month, dropping by 4.1% from April’s figure to £72,877.
The market got off to a strong start in January, with the average amount of equity unlocked by a homeowner standing at £87,035. Since then, however, the figure has fallen, a result which has been linked to the growth of caution where financial decision making is concerned.
On a regional basis, the biggest growth in the amount of equity released by homeowners on an individual basis was seen in Yorkshire and the Humber, at an uplift of 27.4% to £50,575 last month.
Commenting on the figures was managing director of Responsible Equity Release, Stevie Wilkie. He highlighted the resilience of the market amidst difficult conditions, stating: “The equity release market is proving extremely resilient to economic and housing market conditions. The number of homeowners taking out plans and the total amount of equity released were both up in May. Although the average amount of equity released by individuals has fallen slightly, particularly in London, we have seen an increase in the amount of equity in reserve which can be tapped into if and when needed.
“Not surprisingly, the amount of equity London homeowners are taking out has fallen, but this illustrates how much the product has matured and how people view equity release. It is not a product to be used recklessly or in haste and instead provides a valuable financial solution. We spend a lot of time with homeowners assessing their needs to see if equity release is the right product for them. It is not for everyone.
“However, with a greater range of flexible products available to a wider audience, equity release now offers a genuine retirement income solution, and a financial buffer in the face of poor performing savings accounts and investments.”