British home owners took out more equity release plans in May, latest figures show
Equity release is continuing to be popular with older home owners in the UK with the latest figures showing that the number of equity release plans taken out in May increased by 10% over the previous month.
The total amount of equity released by home owners was up 5.8% in May compared to April 2018, according to the latest figures from equity release provider Responsible Equity Release.
The firm says that the equity release market continues to perform strongly despite a topsy turvy residential housing market.
Although the total amount of equity release continues to climb and the number of completed plans has risen, the average amount of equity released by home owners fell slightly in May, down 4.1% on April to £72,877.
The average amount released by individual homeowners reached a high of £87,035 in January and has fallen every month since. The firm believes that this is likely to be market led and a reaction to the current economic landscape and home owners taking more caution over financial decisions.
However, the equity release market is still proving extremely resilient in the face of growing Brexit fears and a stuttering property market in London. It is also shaping up to be another strong year for equity release as retirees look at their options to cover pension shortfalls due to poor performing investments and savings accounts.
Regionally, Yorkshire and the Humber saw the biggest increase in the amount of equity released by individual homeowners, up 27.4% in May to £50,575, compared to £39,688 in the previous month.
Londoners released substantially less equity from their homes in May, almost a third less than the amount released in April. This is likely to be a reaction to the downward pressure on house prices in the capital, which has been the case for a few months now and could continue for some time yet.
‘The equity release market is proving extremely resilient to economic and housing market conditions. The number of home owners taking out plans and the total amount of equity released were both up in May. Although the average amount of equity released by individuals has fallen slightly, particularly in London, we have seen an increase in the amount of equity in reserve which can be tapped into if and when needed,’ said Steve Wilkie, managing director, Responsible Equity Release.
‘Not surprisingly, the amount of equity London home owners are taking out has fallen, but this illustrates how much the product has matured and how people view equity release. It is not a product to be used recklessly or in haste and instead provides a valuable financial solution. We spend a lot of time with home owners assessing their needs to see if equity release is the right product for them. It is not for everyone,’ he explained.