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Equity Release Council reports record Q2 lending

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  • 28/07/2015
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Equity Release Council reports record Q2 lending
Equity release lending totalled £384.3m in quarter two this year making it the largest amount on record lent by the industry to homeowners over the age of 55, the Equity Release Council says.

The record quarter surpasses the previous high of £375.4m advanced by the sector in quarter three 2014.

Housing wealth released in Q2 was up 18% both on the previous quarter and last year’s quarter two which reached a total of £325.6m.

There were 11% more equity release customers in quarter two taking the number of borrowers to 5,414.
The uplift comes despite savers gaining greater access to their pension pots under the freedoms launched on 6 April.

The strong quarter two performance meant the total value of equity released in the first six months of 2015 hit £710m, another record for the industry for the first half of the year and an 11% increase on H1 2014.

Nigel Waterson (pictured), chairman of the Equity Release Council, said: “The last three months have been a landmark period for UK retirees and those approaching retirement and equity release activity continues to grow amid a sea of change. There is no doubt the pension freedoms have created more options for people to consider but the appeal of tapping into housing wealth is on the rise as older consumers seek to make use of all the assets at their disposal.”

The growth in the value of drawdown borrowing was higher than that seen through lifetime mortgage borrowing.

Drawdown lending rose 12% year-on-year from £379.2m in H1 2014 to £423.5m in the first half of 2015. Lifetime mortgage lending increased by 10% year-on-year in the first half of 2015 to reach £285.3m. This is the highest total for lump sum activity in the first half of any year since H1 2007 when the value hit £355.9m.

Helen Davies, head of implementation, Partnership, said: “These new market figures from the Equity Release Council suggest that the market is continuing to go from strength to strength. While equity release should never replace adequate pension provision, considering how you can use your housing wealth in retirement should be part of people’s later life planning. Whether it is used to repay a mortgage, to fund care or simply improve someone’s standard of living, it can make a big difference to people’s quality of life.”

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