The equity release market saw lending rise by 36% in the second quarter of 2017, compared to the same period in 2016, new figures show.
Data from the Equity Release Council (ERC) reveals that equity release lending was £701m in Q2 this year, the highest figure for any quarter since the ERC started recording figures in 2002. More than 8,000 new plans were agreed across the quarter – a rise of 27% year-on-year.
The most popular products continue to be drawdown plans, accounting for 68% of all equity release applications.
The figures show that there is no sign of the market slowing, after growth passed the £2bn mark in 2016 for the first time.
Response from industry has been varied. Stating that growth could be even higher were lenders doing more to signpost equity release to their interest-only maturities, Dean Mirfin, technical director at Key Retirement commented, “There are an estimated 10,000 borrowers this year alone who have either a shortfall or no way to repay their loan and a significant number are going to have a problem.
“Most of the interest-only customers approaching us are finding us themselves. Some lenders are on board with offering wider solutions including equity release but this is still in the minority, and we hope more lenders start to do more.”
Steve Ellis, managing director for Legal & General Home Finance echoed this sentiment, saying: “It’s been another fantastic start to the year for the equity release market.
“However, despite record growth, this is a market that has far more potential. Providers need to continue to meet the needs of consumers with more, flexible products, but all parties must work together to encourage the many already qualified advisers who do not currently provide advice in this sector to talk to their clients about lifetime mortgages.
“The potential for this market to grow yet further is there, but the existing distribution is key – it just needs to be activated.”
Meanwhile, More 2 Life channel marketing director Stuart Wilson agreed that older homeowners are increasingly looking to unlock housing equity to help boost their retirement finances: “With the number of new plans agreed this quarter up by 27 per cent year-on-year, the market looks set to break more records throughout 2017, as equity release products take huge strides towards becoming a mainstream retirement solution.”
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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