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Cost of living prompts equity release surge

Time to talk it through?

Equity release has gained in popularity over recent years, with products enabling homeowners over the age of 55 to access equity locked up in their homes while still being able to live in their property. With the cost-of-living squeeze upon us, new research suggests that many homeowners are choosing to release equity to help them with rising costs.

According to analysis1 of H1 2022 data from Canada Life, 20% of equity release applications were made by customers looking to bolster their everyday living costs. While a further 38% were looking to raise money to pay for home improvements and 50% wanted to use equity release to clear their outstanding mortgage.

Record highs in Q2

Equity release lending fi gures hit record highs in the second quarter of the year, reaching £1.6bn - representing a 26% year-on-year increase, marking the fourth consecutive quarter of near record figures.According to the Equity Release Council (ERC)2 nearly 12,500 new plans were taken out by over-55s between April and June 2022 alone. David Burrowes, Chairman of the ERC, commented on the data, “The fact that hundreds of homeowners are now choosing to release equity each day, based on detailed fi nancial and legal advice, is signifi cant progress from the days when the market was considered an under-developed niche rather than the mainstream option it has become.”

He continued, “Raising awareness of how modern equity release products work alongside other fi nancial solutions is essential, so people who are asset-rich but cash-poor can benefi t from the wealth they have built up over their lifetimes and also support those around them.”

Time to talk it through?

Equity release isn’t right for everyone, there are positives and negatives, and careful consideration is vital to ensure it is a suitable option for your individual circumstances. To fi nd out more about your options, we can help. Equity Release will reduce the value of your estate and can aff ect your eligibility for means tested benefi ts. 1 Canada Life, 2022, 2 ERC, 2022