Why are so many people releasing equity from their homes?

The most recent figures from the Equity Release Council (ERC) show that equity release clients borrowed a total of £4.8bn last year – a 24% rise on 2020’s figure.

There are many for reasons for this. Martin Wade, director of Access Equity Release commented, “Greater awareness and understanding of equity release is one of the reasons more people are looking into their equity release options. Add to that the fact that rates have been so low, costs of living are rising and we are an ageing population and you can see why more people want to take equity release advice.”

Equity Release figures in detail

The latest figures show

• £4.3bn from 40,964 new plans and £500m from repeat clients.
• Last year saw 76,154 clients either enter the market, use a drawdown facility, or extend an existing plan – a 4% increase on 2020.
• Total lending for 2021 was higher than the record set in 2018, £3.9bn
• In the final quarter of 2021, equity release performance consisted of 19,975 new and returning customers releasing £1.34bn – the busiest quarter on record.
• For new borrowers, new lump sum plan sizes grew 20% on a yearly basis in Q4 to £125,911 and total borrowing for new drawdown plans went up by 18% – £96,699 taken straight away and £35,532 held back, on average.

ERC chairman David Burrowes says: “Cost of living pressures are just one of many reasons why homeowners are choosing to cash in on years of wealth accumulated in their homes. Increasing loan sizes partly reflect the rise in house prices and a more affluent type of customer using lifetime mortgages to plan their finances or gift a living legacy to family members.

“Having proved itself to have solid foundations through a period of uncertainty, the equity release market’s return to growth has just as much to do with trust and innovation as it does with external factors as households look to manage their finances in later life.”

:: Use our Equity Release Calculator to work out how much cash you could release.

It is important to take expert advice on equity release before deciding whether it is right for you. Contact us to find out more from one of our highly trained equity release advisors.