After a slow 2023, the equity release market is showing some signs of tentative improvement.
In Q1 of this year, the number of new and returning customers using equity release products rose to 14,216 – 4% higher than the previous quarter1. Existing customers are showing most confidence in the market, as they drove a 6% increase in drawdown activity. Meanwhile, the number of new customers fell by 11% in Q1, suggesting that this group are proceeding with a little more caution.
Reflecting on the data, Chair of the Equity Release Council, David Burrowes, commented, “New customers are choosing drawdown plans with smaller initial advances while existing customers are being more modest about their borrowing compared to the start of last year.”
Where is the unlocked money going?
A lifetime mortgage lender analysed the new equity release plans that were taken out in Q1 and found that one in five of their borrowers owned a property worth over £550,0002. When asked how they planned to spend their money, 22% said of customers said they wanted to make home improvements. Meanwhile, nearly 20% hoped to repay debts and mortgages, and 15% were planning to use the unlocked cash on holidays.
Seek guidance
It is essential that you seek professional advice before releasing equity on your home. We can talk you through the advantages and drawbacks.
Equity Release and Lifetime Mortgages will reduce the value of your estate and can affect your eligibility for means tested benefits.
1ERC, 2024, 2Pure Retirement, 2024
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.