The value of equity release lending in Q3 compared to the same period last year has risen by 18.8 per cent from nearly £884m, according to Key’s market report.
In total, almost £3bn of lending has been advanced to older borrowers so far this year. In 2019 and 2020, lending for the whole year fell just short of £3.4bn.
The number of equity release plans taken out, however, has decreased by 3.2 per cent year-on-year from 10,671 in Q3 2020 to 10,333 remaining below the pre-pandemic levels of 11,772 seen in Q3 2019. Paying off debts and gifting to family and friends for property purchases or an early inheritance were the reasons behind almost two-thirds of equity release borrowing in Q3.
The average loan amount released was £101,593, around 23 per cent higher than the £82,827 in Q3 2020.
The average age of a borrower was 70 years old. Almost 50 per cent of those who take out equity release are between the ages of 65 and 74 years old.
Will Hale, chief executive at Key, said: “Against the backdrop of a pandemic, the equity release market is on track to break the £4bn barrier and potentially even touch £4.5bn by the end of the year.
“This year we’ve seen increasing numbers of people using equity release to support families, manage their current borrowing and use the historically low rates to remortgage their existing equity release plans. Whilst many plans have been put on hold during the pandemic, we also expect to see the return of people looking to boost discretionary spending as they look again at how to fund their later life ambitions.”