Record breaking equity release market hits all time high

Record breaking equity release market hits all time high
The average amount being released by retired homeowners at nearly £78,000 underlines that property wealth can help with a number of issues

Key Retirement has released data today showing that pensioners withdrew more than £2.1bn of property wealth in 2016 surging the already lucrative equity release market to a new all-time high.

According to the figures, the total value of property wealth released in 2016 grew by 26% against 2015 reaching £2.154bn – the fifth increase in the equity release sector in a row taking it to more than double its size in 2011.

Homes paid out more than £5.8m a day last year to pensioners with the average retired homeowner accessing nearly £78,000 from their property.

Mortgage repayments accounted for 22% of customers’ use for funds released.


Londoners cashed in around £143,000 compared with £49,656 in Northern Ireland. More than half the value of property wealth released was in London and the South East, where around 10,500 homeowners shared £1.1 billion.

Across the country seven out of 12 regions saw growth in the value of property wealth released with East Anglia recording the biggest increase at 67%, followed by a 43% rise in London, while the South East saw growth of 35% and Wales growth of 32%. The biggest fall in property wealth being released was 29% in Northern Ireland while the North West and Yorkshire & Humberside were only slightly lower.

Dean Mirfin, technical director at Key Retirement, comments: “The equity release market has broken through the £2 billion barrier for the first time and has more than doubled in value in just five years, highlighting how property wealth is making a huge contribution to retirement planning.
 
The average amount being released by retired homeowners at nearly £78,000 underlines that property wealth can help with a number of issues for customers, ranging from improving their homes and going on holiday to helping family and clearing debt.
 
With more than 1 in 5 releasing equity from their homes are repaying mortgages and with 2017 being the start of the first major wave of interest only mortgage maturities we expect demand from those with a shortfall to repay the capital, or no means at all, to turn to equity release as a solution which will further drive demand.
 
Rate cuts across the market and the launch of new solutions demonstrates that the market is responding to the growing need for alternatives to traditional retirement income solutions which are being squeezed by historically low interest rates.”

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Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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