Equity release rises again
Find out how much you can borrow today!
Equity release rises again is continuing to enjoy a spell in the sun, latest figures4 show, as an increasing number of older homeowners choose to borrow against the value of their home.
Up and up
Equity release allows over-55s to access some of the value of their home as tax-free cash. In total, homeowners used equity release to borrow £6.2bn in 2022, a 29% yearly rise. Since 2017, the market has more than doubled. It’s not only higher amounts being borrowed; there are now more individual equity release plans too. In 2022, 93,421 people chose to release wealth from their property, up 23% from a year earlier. The number of new equity release plans taken out also rose by a fifth - equity release rises again.
The main reason for releasing equity is still to meet everyday spending needs. With household budgets stretched, equity release is a convenient choice for many older homeowners trying to keep up with rising bills. Last year, more than half of new customers opted for lump sum plans, up from 43% in 2021. The average lump sum received was £128,382 in the final quarter.
As Equity release rises again, its popularity reflects recent improvements for consumers. For example, in March 2022, new regulation was
introduced to guarantee that all new plans with Equity Release Council (ERC) approval give customers the right to make voluntary, penalty-free partial repayments to reduce interest costs. In addition, products meeting the ERCs standards are required to feature a ‘no negative equity guarantee,’ meaning your estate will never owe more than the property is worth when it is sold.
Equity release might not be the best choice for everyone. When considering releasing equity, it is important to weigh up your options and make sure it is suitable for your unique needs.Get in touch today to see how we can help!
Equity Release Council, 2023