Well on it’s way to becoming a basic retirement planning tool, equity release activity was up 61% year-on-year in the first quarter of 2017, figures from the Equity Release Council have revealed.
There were 8,351 new equity release plans in the first three months of 2017. The same period in 2016 was 5,175.
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Nigel Waterson, chairman of the Equity Release Council, said: “The early months of 2017 have bucked the seasonal trend of a slower start to the year, with both new customer numbers and total lending reaching record levels.
“Alongside this, the annual rate of growth is also the fastest that the sector has seen, as equity release continues its progress to becoming a mainstream retirement product among older homeowners.
“Much of this activity is due to increasing supply as well as growing demand. The past year has continued the trend of new providers, products and flexibilities coming onto the market.”
“Regulatory changes, such as the common-sense relaxation of affordability rules for interest-served products, have also provided more scope for the sector to meet burgeoning demand.”
Lump sum plans accounted for 40% of all new plans agreed across the quarter, the highest share of equity release lending since 2009.
Alice Watson, head of marketing at Retirement Advantage Equity Release, reckoned innovation from providers is helping the market grow.
She said: “This is unprecedented growth for the equity release market.
“These figures reinforce the trend that take-up of equity release is growing at levels unparalleled by other forms of mortgage finance.
“There appears to be no let-up in the number of people recognising the value in considering equity release as part of a more holistic approach to retirement income.
“With continued innovation among lenders looking to expand product ranges providing a more compelling choice for consumers, it’s no surprise that the equity release sector is proving attractive to more people.”
Stuart Wilson, Chanel marketing director at equity release lender more 2 life, said: “While these results are of course welcomed, they are not a huge surprise.
“more 2 life has been saying for some time now that this industry is set for huge and rapid growth and the figures out today reflect this.
“Last year we predicted the market would reach the £2bn mark in 2016, and the early signs are that we are on track for another record year.”