Retired homeowners released £3.6 billion in new property wealth last year as the market doubled in size in just three years, new data from the UK’s leading independent equity release adviser Key reveals. When further advances and additional drawdown are taken into account, the market is getting close to £4 billion.
Homes paid out nearly £10 million a day in 2018 with customers releasing an average £76,500 to improve their standard of living in retirement. Plan sales rose by 21% in the year to 47,081 and new lending increased by £586 million to a new record high of £3.6 billion – more than double the £1.71 billion level achieved in 2015, Key’s 2018 Equity Release Market Monitor shows.
Will Hale, CEO at Key, said: “The equity release market recorded another strong year of growth in new lending taking it to £3.6 billion and has doubled in size in three years demonstrating how important it is to retirement planning. Once further advances and additional drawdown is included it is getting close to £4 billion.
“The growth in gifting highlights the intergenerational benefits of equity release for families with money being used to clear debts, fund university fees and pay for house deposits and weddings. Even the use of equity release to fund home and garden improvements has benefits for families as it helps people to ‘age-proof’ their home and preserve wealth for the family.
“Debt remains however a major issue for some retired people and substantial numbers are relying on equity release to clear credit cards and loans as well as paying off mortgages. Good specialist advice is key to ensuring that older homeowners receive the most benefit from their property wealth and use it in the most appropriate way for them and their families.”