Cost of living drives equity release increase
In recent years, equity release has become an increasingly popular way for older homeowners to unlock cash tied up in their properties.
Equity release products enable homeowners over the age of 55 to access equity locked up in their homes while still being able to live in their property.
New research suggests that many homeowners are now choosing to do so to help them with the rising cost of living.
According to analysis1, 14% of equity release applications in Q1 2022 were made by customers looking to bolster their everyday living costs. A further 12% were looking to unlock cash in order to consolidate unsecured debts. Meanwhile, over a third (36%) wanted to use equity release to clear their outstanding mortgage.
Equity release use hits record highs
Q2 2022 saw equity release lending figures hit record highs, reaching £1.6bn – a 26% increase year-on-year. This marks the fourth consecutive quarter of near record figures, according to the Equity Release Council (ERC)2 and equates to nearly 12,500 new plans being taken out by over-55s between April and June 2022 alone.
ERC Chair David Burrowes commented, “Raising awareness of how modern equity release products work alongside other financial solutions is essential so people who are asset-rich but cash-poor can benefit from the wealth they have built up over their lifetimes and also support those around them.”
Talk to us
Equity release isn’t right for everyone, it can prove an expensive option, can be inflexible and may impact entitlement to benefits. It is vital to take financial advice to ensure it is a suitable option for your individual circumstances. To find out more about your options, please do get in touch.
1Canada Life, 2022
2Equity Release Council, 2022
Think carefully before securing other debts against your home. Equity released from your home will be secured against it.