Recent research indicated that October saw a record number of homeowners release wealth from their homes.
Despite the reportedly stagnant state of the property market, the figures from Responsible Equity Release show that completed equity release plans were up by 19.2% month-on-month, with the volume growing by over three-quarters since October last year.
In total, the amount of equity released last month was more than double the amount released during the corresponding month in 2016.
Whilst the increase in completed plans has been significant, the same cannot be said for the amount of equity released on an individual level; October saw the average fall to £71,000, down from £84,047 in September.
On a regional basis, the level of equity released by those eligible in the North East was over seven times that of the month before. In contrast, London and Northern Ireland were the only places to see a fall in the number of homeowners unlocking cash through their properties.
Commenting on the figures was Steve Wilkie. The managing director of Responsible Equity Release stated: “It finally happened. The Bank of England has raised the base rate and raised the hopes of millions of UK pensioners.
“Now the Bank of England has turned the rate rise tap on, we could well see a series of incremental rate rises over the next few years. That would be great news for UK pensioners, but right now, what does a 0.25% rate rise mean? To be honest, not a great deal. It’s unlikely to have any financial impact, especially with banks showing little desire to pass this rate rise onto savings accounts.
“It leaves pensioners in the same financial predicament. They have endured a decade of dire savings growth, and with inflation likely to rise beyond three percent, many are struggling to cope with escalating living costs.
“If investments and savings aren’t providing income, what are their options? For many, it’s their home; the only asset they have which they can generate an income stream from, and it’s no surprise to see the popularity of equity release grow as a result.
“The equity release industry has proven itself to be well placed to provide a genuine retirement income solution. The industry is listening to what consumers want and adapting its product range accordingly. When millions of people have paid into their homes, why shouldn’t they be able to make their homes work for them during their lifetime.”
