The Equity Release Council’s spring report showed a total of 21,917 new plans were taken out in H2, compared to 23,285 in the same period a year ago.
Some 2,081 further advances were taken out compared with 2,248 in the previous year.
The weakest activity was recorded among returning drawdowns, with 13,489 completed making it the lowest in a six–month period for three years. This was compared to 18,701 in H2 2019.
Overall, 72,988 customers released £3.89bn of property wealth in 2020. Despite the pandemic, this was broadly flat on the £3.92bn accessed by 85,497 borrowers in 2019.
Lower rates and more choice
The number of products available to older homeowners improved last year, as 100 extra equity release products came to the market in the latter half of the year, bringing the total number of deals to 488.
Retirement interest-only (RIO) provision also increased, with more than 100 products on the market for the first time.
By January 2021, 111 products were available compared with 74 a year earlier and 38 in early 2019.
Lifetime mortgage product rates fell to a record low of 3.95 per cent in January, down from 4.48 per cent a year ago.
The proportion of equity release plans with interest rates lower than four per cent rose to 58 per cent in January 2021. This includes a quarter of products with rates below three per cent which offer incentives such as fixed or capped interest rates for life or a no negative equity guarantee.
David Burrowes (pictured), chairman of the Equity Release Council, said: “After the unprecedented upheaval of early 2020, the equity release market showed signs of recovery as households and businesses remained resilient against a challenging backdrop.
“Today’s market has added choice and flexibility to the robust protections and guarantees that give consumers confidence that modern equity release is safe and reliable.”
He added: “We will continue to work with industry, government, policymakers, regulators and consumer bodies to ensure the products and advice available continue to serve customers’ changing needs.”