The average loan taken increased by 17% to nearly £65,000, according to an analysis from over 55s specialist adviser Key Retirement Solutions.
The firm’s latest Equity Release Market Monitor, which covers the first half of 2014, says this demonstrates that there is a growing confidence in using property wealth to improve standards of living in retirement and this is driven by the strength of the housing market.
Total equity released in the six months to 30 June increased by 26% to £641.8 million from £508.4 million in the first half of 2013, while plan sales rose 5% to 10,013 from 9,540 in the same period last year.
The report says that the money released is increasingly being used to improve standards of living, with 66% of customers using some or all of the cash to fund home or garden improvements compared with 55% last year. Some 35% used the cash to pay for holidays, compared with 32% in 2013.
The analysis also shows the importance equity release plays in easing the burden of debt in retirement, with substantial numbers of retired home owners clearing debts. Some 20% used some or all of the money to pay off mortgages, while 30% are clearing credit cards or loans.
‘Equity release is making a major contribution to retirement planning for thousands of home owners and that is underlined by the growth in the average loan size of nearly £10,000,’ said group director Dean Mirfin.
‘The massive changes on the way people fund and save for retirement highlight the increasing role that property wealth will play and the equity release market is ideally suited to the new retirement flexibility,’ he added.
The data also shows that the total amounts released rose in 11 out of 12 regions across the country, while plan sales rose in eight out of 12 regions. But growth in Northern Ireland was particularly strong where plan sales and total value released increased by nearly one and a half times.
London recorded growth in total value released of nearly 60%, while the South West and South East rose by 30% plus.
