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Equity release lending sees highest quarterly rise since 2004

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  • 27/10/2015
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Equity release lending sees highest quarterly rise since 2004
Equity release providers have enjoyed their busiest quarter for 11 years as lending volumes rose by £68.3m, the highest quarterly rise seen since 2004.

Statistics released by the Equity Release Council (ERC) revealed lending in quarter three reached £452.6m which it said was a new lending record for the second successive quarter. Quarter three lending was 21% higher than the same quarter in the previous year compared with 18% year-on-year growth in quarter two.

Equity release borrowers took out 6,049 plans in quarter three which is the first time transaction numbers have broken through the 6,000 mark since the end of 2008. Quarter three plan numbers were 12% higher than the previous quarter and achieved 9% growth year-on-year.

The £1.16bn of lending in the first three quarters of this year has already exceeded the annual total for 2013 of £1.07bn and is within £220m of the record annual total of £1.38bn in 2014.

Nigel Waterson, chairman of the ERC, said: “Appetite among over-55 homeowners for tapping into their housing wealth continues to grow. There is increasing awareness that equity release can offer many benefits in later life by providing people with extra income or the means to meet other costs and expenses.”

Waterson said the months ahead would produce important discussions with regulators and government about how to build on this foundation so more people can make use of what is often their biggest source of retirement wealth.

Helen Davies, head of implementation at Partnership, said the figures highlighted a market close to realising its full potential as a retirement funding option.

“While the housing market is currently buoyant, there have been some suggestions that a correction may be due so it will be interesting to see whether the sustained growth we have seen will continue if we do see a downturn.”

She added: “I suspect that economic factors such as a lack of pension provision, the new pension freedoms and the rapidly aging population will continue to drive the market going forward but this remains to be seen.”

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