Equity release market shows signs of recovery
The equity release market is gradually showing signs of recovery following the initial lockdown last spring, although activity is still below the previous year’s levels. A total of £963m of equity was released in Q3 2020 by new and returning customers, according to data from the Equity Release Council (ERC), up 38% from Q2 but down 3% from Q3 2019.
The number of new equity release plans agreed increased 41% to 10,351 from the previous quarter, with September being the busiest month. The improvement was likely influenced by extended pipelines, as some plans that might otherwise have been completed earlier in the year bore fruit in Q3. However, the ERC added that the number of new plans remained 9% down year-on-year and Q3 2020 was the quietest for new customers (after Q2 2020) since Q1 2018. Similar trends were also found among returning customers, with 6,697 customers returning to take extra drawdowns from their agreed reserves. This was up 19% from the previous quarter’s 5,608 but still down 30% from the 9,605 seen a year earlier.
Looking further ahead, David Burrowes, Chairman of the ERC, said that the key market drivers remain in place, “People are living longer and retirement finances are increasingly squeezed as generous final salary pensions edge further to extinction. Many older households are already facing a situation where their expenses outweigh their disposable income, which makes access to property wealth an important pillar to support later life living standards.”
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Equity release won’t be the right choice for everyone and it’s important to consider your options carefully. If you would like to know more about the choices available to you, don’t hesitate to get in touch.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. Equity released from your home will be secured against it.