Borrowing drawing on the equity tied up in people's property has hit its highest quarterly level since records began in 2002, figures show.
Equity release lending totalled £375.5m in the third quarter of the year, the Equity Release Council trade body said. More than 5,500 people aged over 55 released equity from their homes over the same three months, it added. However, the Money Advice Service suggests this form of borrowing can be "expensive and inflexible".
The total borrowed in the first nine months of the year has reached 95% of the total of all of 2013, the figures showed. The average value of equity release also reached its highest level since 2002 in the third quarter of the year, with homeowners typically "releasing" £67,467. Nigel Waterson, chairman of the Equity Release Council, claimed that for many people aged over 55, pension savings were failing to cover rising costs. "Rising house prices also mean that customers have a growing pool of equity at their disposal and can still keep a large proportion of the value of their house intact." he said. "Equity release can offer a large and much-needed boost to people's finances, proving comfort and stability throughout retirement."
However, the government-backed Money Advice Service said that this form of borrowing was not suitable for everyone. "They can be expensive and inflexible if your circumstances change. They may also affect your entitlement to state or local authority benefits," it warned. Steve Wilkie, managing director of provider Responsible Equity Release, said that many of their customers were motivated by providing early inheritance for members of their family. He said the largest increase in custom was in the North East and the South East of England.
Sam: 22nd Oct 2014 15:39:00
Lenders relax maximum mortgage age
Lenders relax maximum mortgage age If you're an older homeowner, the last few years may have been challenging if you were looking to remortgage your property.
Drawdown investors remain optimistic
Drawdown investors remain optimistic The onset of the pension freedoms gave retirees more choice than ever over how to spend their pension pot, and many are making the most of that flexibility by opting for income drawdown, whereby their pension savings remain invested in the stock market. Yet this in itself can pose risks, particularly given how volatile the stock market can be, but luckily, investors don't seem to be put off.
Equity release lending hits record £3.6bn
Equity release lending hits record £3.6bn 2018 proved to be another record year for the equity release sector, with latest figures revealing that retired homeowners released £3.6bn in property wealth over the year, the highest annual total ever seen – and by all accounts, 2019 could go even better!
Motivation to remortgage at 11-year high
Motivation to remortgage at 11-year high The financial incentive for mortgage borrowers reaching the end of their current fixed rate deal to remortgage to a new deal has soared to an 11-year high.
What's coming up in 2018....