Equity-Release Levels Reach New High
The latest figures released by the Equity Release Council show that levels of equity release are now at their highest ever. The ability to release money tied up in a property is enabling many people over the age of 55 to enjoy their retirement, and they can choose to spend the available money on a range of areas.
The 2014 figures highlight that the total amount of equity released was nearly £1.38 billion. This was an increase of 29% from the 2013 figures and moves the sector above the level it was at before the recession. In the final quarter of last year alone, equity release reached £365.7 million - a year-on-year rise of 18%. In the second six months, there was a total of £741 million released from UK properties. The increase in the amount of equity homeowners are choosing to release also indicates that more people are becoming aware of the potential benefits, and the option is increasing in popularity.
Over-55s Boosting the Market
Those homeowners over the age of 55 are providing a significant boost for the market. Over 5,700 of those in this age group released equity during the fourth quarter of 2014. It is increasing their available finances and can help to pay for their living costs during retirement. Some are using the additional money for everyday expenses, whilst others are choosing to invest in their property, perhaps by using Halifax fabricators to install exterior stairs.
The number of customers choosing this option has now risen for four years in a row. There were 21,336 new customers last year, representing a 13% rise on the previous year. The average amount that these homeowners released was £64,787, which is a 14% increase on 2013 levels.
Homeowners who want to release equity from their home can do so using a few different products. The most popular option is a drawdown product, which enables customers to take out smaller amounts when required. 66% of customers opted for this, with another 34% going for a lump sum. Home reversions were under 1% of the total last year.
Equity release provides homeowners with greater flexibility. It enables them to improve their property, adapt their home to suit their needs, travel or simply live at the standard they’re accustomed to.
With more awareness of equity-release products and the potential benefits they offer, there will probably be further growth in the market through 2015.