Equity Release Market Begins Recovery
The number of new and returning customers accessing their property’s wealth edged closer between April and June to pre-pandemic levels, according to statistics from the Equity Release Council (ERC).
The council’s data, released this week, showed that 20,352 people accessed their properties wealth in April and July. In comparison, an average of 21,036 customers performed the same task each month in 2018 and 2019.
A press release from the ERC said that returning drawdown activity made the strongest recovery of any segment compared with Q2 2020 with customer numbers up 67 per cent, having been the most subdued part of the market during the pandemic.
David Burrowes, chairman of the ERC, said: “Judging by these latest figures, the equity release market is showing signs of stability and durability as the option to access property wealth opens doors for thousands of people to pursue their financial goals. We were accustomed to more than 20,000 new or returning customers releasing equity each quarter in the two years before Covid-19 struck. We’re now seeing activity levels steadily returning back to that status quo, with some existing customers returning to make withdrawals that were put on hold last year. The gradual recovery suggests people are carefully weighing up their circumstances and long-term needs, helped by specialist financial and legal advice, with speculation about a spike of activity during the pandemic so far proving unfounded.”
He added: “The steady recovery has been helped by confidence in the wider property market, where house price gains over the last year have given many homeowners more equity at their disposal. Equity release has become a socially important means for one generation to help another, as well as meeting later life financial needs. June’s Stamp Duty deadline will have prompted some older homeowners to pass on a ‘living inheritance’ so that younger family members can climb the property ladder.”
Will Hale, CEO at Key, said that the figures in Q2 2021 showed the continued strength in the market.
He added: “With a strong increase in the number of existing customers returning to make further withdrawals this is a good indication that confidence levels are returning and that older customers are getting on with their plans for later life and looking to the equity in their home to help fund these needs and wants.”