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Equity release lending hits £1.18bn in Q1 2019 – Key

  • 23/05/2019
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Equity release lending hits £1.18bn in Q1 2019 – Key
Total lending in the equity release market hit £1.18bn in Q1 2019, up from £1.03bn in the same period a year ago, according to the latest equity release market monitor from Key.


The figures showed that older homeowners are increasingly using property wealth to clear unsecured debts and mortgages to strengthen their later life finances.

The number of customers using money from their homes to pay off credit cards and loans hit a three-year high of 35 per cent in Q1 2019 which is five per cent higher than in Q1 2018.

Additionally, 28 per cent used property wealth to clear outstanding mortgages compared with 21 per cent in 2018.


Home and garden improvements

Plan sales rose 6.6 per cent year-on-year to 11,190 in Q1 2019 compared with 10,495 in 2018. Northern Ireland, the West Midlands and Yorkshire and The Humber recorded the biggest increases as growth spread across the country.

Customers released an average £75,032 during the three months and the most popular use of the money remains paying for home and garden improvements.

Around 60 per cent of people used their equity release for this purpose with many of these using some or all of the cash to future-proof their home for retirement. Around one in three chose to pay for holidays while 30 per cent were able to use some or all the cash to help family.


Grow continuing in 2019

Will Hale, CEO at Key, said: “Typically the equity release market has a quieter start to the year but the latest Q1 results suggest that we should see continued growth in 2019.

He added: “Nearing or entering retirement with an income that might be exceeded or matched by debt repayments can be hugely stressful and may mean people need to make fundamental changes to their plans such as working longer.

“However, this will not solve everyone’s issues and is not even viable for some so looking into downsizing, equity release or other later life lending options might be the right answer. Not only will making sensible choices around property mean that people are less stressed but it will help to set them up for a more comfortable retirement in the future.”

In April, the quarterly figures from the Equity Release Council revealed a rise in both cash released and customer numbers, with £936m of property wealth unlocked by 20,397 customers. This figure includes only new lending and represents the 95 per cent of the market, which equates to the Equity Release Council’s members.

On the other hand, Key has published its own data representing the whole market, also taking into account non-members not members and draw down figures.


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