Equity release lending reaches new high of £1.6 billion in Q2 – industry comment

by | Aug 2, 2022

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Equity release lending reached a new high of £1.6 billion in Q2 2022. Commenting on today’s figures from the Equity Release Council, Stephen Lowe, group communications director at retirement specialist Just Group, said:

“Demand for equity release has recovered strongly from the pandemic wobbles with the last three quarters each setting new lending records. The total amount released in the first six months of this year is more than £3.1 billion, 36% more than the previous H1 record of £2.3 billion in 2021. 

“The number of new customers is also trending higher following the pandemic as we head into the traditionally busier second half of the year. Clearly lifetime mortgages, which now account for virtually the entire equity release market, are becoming a keystone of financial planning for some customers alongside their pensions and other savings.

“The business drivers continue to be very strong. House prices are still rising, providers are competing hard for business with extra features such as interest-servicing and medically underwritten rates. Locking into today’s interest rates – still near historic lows – is appealing. It’s likely some demand is from people who put plans on hold during lockdown, alongside those starting to feel a squeeze from rising household costs.

“Homeowners may be using equity release to generate lump sums, extra income or for estate-planning but the key point for customers is that they seek out high quality advice to ensure the plan fits their unique needs and aspirations.”

HUB Financial Solutions:

Equity release lending reached a new high of more than £1.6 billion in Q2 2022. Commenting on the Equity Release Council’s Q1 market report, Simon Gray, managing director at equity release advisory firm HUB Financial Solutions, said:

“This is another strong quarter of data that shows a continued return to market growth after the disruption of the pandemic. The number of new customers was up by 26% on Q2 2021 and the total value of lending was 37% higher. These are by far the strongest first half figures ever seen and bode well for the rest of the year and beyond.

“This growth is underpinned by competitive interest rates and innovations such as medically underwritten rates and the Council’s new product standard allowing penalty-free partial repayments. The result is that the plans are becoming more customisable for different situations and this means professional advisers can personalise solutions for each unique client.

“To ensure customers get the most suitable plans and features requires highly professional, knowledgeable advisers who first understand the borrowers’ situations and requirements and then look at the most suitable solutions to meet their needs. These are very long-term commitments that each customer needs to understand fully, whether their goal is bolstering their income, estate planning, providing cash lump sums, or paying for care.”

Craig Brown, CEO of Legal & General Home Finance: “We’re pleased to see people continuing to take advantage of the increased equity in their homes, with over 200 customers choosing to release equity from property every day in Q2 of this year. Our recent ‘Equity Economy’ report, in partnership with the Centre for Economics & Business Research (Cebr), forecast that the average amount of equity released is set to rise above £170,000 within the next five years, even taking into account an expected slowdown in house price growth. Our report also highlighted that equity release funds currently account for one in every £90 spent by retired people within the UK, showing the industry is now seen as a mainstream source of funding.

“Legal & General Home Finance has long-championed innovation and increased product choice in the later-life lending market and we believe we have an important role to play in helping homeowners achieve their later-life goals.”

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