According to the Equity Release Council, the equity release market in the UK is on course for a record-breaking year, looking set to break the £4 billion barrier by the end of 2021.

The council confirmed that, in the three months to 30 September 2021, homeowners took out £1.049 billion in property wealth. 

Up from almost £884 million in 2020, this represented an 18.8% year-on-year increase, although the total number of equity release plans fell slightly by 3.2%. 

To the end of September 2021, the total amount of equity released from the values of people’s homes was £2.989bn. 

Will Hale, Chief Executive at Key Retirement, said: 

“Against the backdrop of the pandemic, the equity release market is on track to potentially touch £4.5bn in 2021. 

“We’ve seen more people using equity release to support families, manage their current borrowing and use the historically low [interest] rates to remortgage existing equity release plans.”

Equity release is available to homeowners over the age of 55 and broadly:
 

• Allows them access to the equity in their property.
   
• Allows them to continue to use/live in the property.
   
• Tends to be based on the property value and level of debt, rather than the income of the borrower or their ability to repay the loan.
   
• The expectation is that the debt will be repaid on the death of the borrower and subsequent property sale.
   

Although many use equity release to unlock the value in their property, it can be a potentially disadvantageous way to raise cash, for example by reducing the value of an estate left to pass on. Therefore, serious consideration must be given before embarking on equity release. We find that it can be helpful for several generations, all of whom may be affected in the long-term, to be involved in the decision-making.

Always take independent advice from a professional adviser with specific lifetime mortgage and equity release authorisation before making any decision on releasing equity from your home.

Get in touch

To discuss your own circumstances and whether equity release may be right for you, give me a call today on 01483 205890; I have the relevant FCA authorisation and many years’ experience advising clients.

Interested in finding out more?

Read our blog: Equity Release: considerations when raising money on your own home