Boom in equity release


Jul 19, 2017
equity release

I was reading a recent post on the website Property Wire, on the 11th of July 2017,  and discovered new research which shows that amongst over 50s homeowners, around one in three of them has used equity release as a way of making their lives and their homes more comfortable.

The research suggested that there has been a 30% surge in the number of the over 50s taking up the opportunities presented by equity release to enrich both their own lives and those of their children and dependents.

Our own experience

The results revealed by this research very much accord with our own experience. We, too, have seen a 25% increase in equity release enquiries this year.

Our own experience also suggests that more and more “empty nest” homeowners have become comfortable with the concept of unlocking the equity otherwise tied up in their home, so that they are able to enjoy the proceeds whilst many years of life lie ahead of them.

We’ve also published results which highlight the fact that some £633 million worth of capital tied up in property was released in this fashion during the first three months of 2017 alone. This represents an increase of almost 53%, compared to the same period last year, when just 5,447 equity release plans were sold, compared to this year’s 8,604.

Whereas this type of homeowner might once have regarded equity release as a solution of last resort to meet some unexpected financial emergency, recent research suggests that it seems to have become a normal tool in the financial planning which many individuals conduct as they approach their 50th birthday.

Just five years ago, for example, it was to meet just such a financial emergency that was given as the main reason by as many as 40% of equity release applicants – today, that proportion is down to just 25% of applicants.

Is equity release for you?

Of course, everyone’s circumstances are different – and equity release might be suitable for some people but not for others.

There are also many different equity release plans available from a variety of providers. But whether you choose a solution based on a lifetime mortgage or a home reversion plan, one of your most important considerations is likely to be the amount of capital equity release might bring.

We have made this essential piece of knowledge especially easy to discover by publishing a user-friendly equity release calculator – so that you simply need to enter your best estimate of your home’s current market value, the amount of any outstanding mortgage on the property, and your age or the age of the youngest of the property owners if it is in joint names.

The result is available within seconds and may give you the first step in what is probably the next most important decision with respect to equity release – the type of legacy you wish to leave to your children and their reaction to your decision to pursue any such idea.

In this connection, it is interesting to note that the number of homeowners choosing to make gifts to younger family members from the proceeds of an equity release has grown by 25% in the past five years. Gifts like this have been used to put down a deposit on a first home, to meet the costs of educating grandchildren or for wedding costs.

Thinking of releasing equity from your home?

See how much cash you could release


Ashley Shepherd is an Over 50s Personal Finance Expert

ashley shepherd

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