Home Improvements, debt consolidation, deposits for house purchase for family members, lifestyle changes, holidays, everyday living and retirement income needs are the many reasons that Equity Release is used.
The Equity Release Council has published its latest market.
The report established record amounts of property wealth were accessed via equity release products in the last 3 months of last year and across 2021 by more than 76,000 new and returning customers, according to the Council.
Its figures show the sector has not only maintained its resilience throughout the uncertainty of the pandemic but has now returned to growth for the first time since 2018.
Total lending to homeowners aged 55+ via lifetime mortgages and home reversion plans grew by 24% year-on-year, compared with 31% lending growth across the wider mortgage market.
Average loan sizes also increased, partly influenced by rising property prices and an increase in wealthier customers using equity release as part of their financial planning.
David Burrowes, Chairman of the Equity Release Council, said: “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.
Read how important families are when considering Equity Release
“Having proved itself to have solid foundations through a period of uncertainty, the 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.
“Products have continued to evolve in recent years with new providers and features adding to their appeal. Increasingly flexibility has brought lifetime mortgages closer to their residential equivalents, by offering capital or interest payment options alongside long-term, time-honoured protections against rising interest rates and negative equity”.
Key points to if you are considering Equity Release:
1. Consider all your options-Make sure you’re claiming all the state benefits due to you, and explore the possibility of downsizing, or renting out a room.
2.Talk to your family-Discuss your plans with them. They may be able to help, or support your decision to take equity release.
3. Do your own homework-Unbiased information can be found via Moneyhelper.org and on the Equity Release Council’s website Equityreleasecouncil.com.
4. Understand the differences-Consider the type of equity release you need. An adviser will help you understand the difference between home reversion plans (where ownership is transferred to the lender at the outset), lifetime mortgages, and any other options open to you.
5. Take your time and remember-Only take advice from independent, qualified and regulated firms and ensure you’re provided with a full illustration of costs and charges.