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Older homeowners reap £1bn equity release windfall from housing boom.

The thriving housing market hasn’t just benefitted home sellers – it’s also given those homeowners who don’t want to move house, but still want to release the value tied to their property, a chance to cash in too.


According to recent industry data, the surge in house prices that came after the announcement of the stamp duty holiday has led to record returns for lifetime mortgage customers.


The first three months of 2021 saw customers receive an average of £103,000 through equity release. Compared to the average £83,000 released during early 2020, that’s an incredible 25% increase.


Investing in a debt-free future.


For many of us, our property is the most significant asset we have. So it’s no surprise that being able to access that money without selling your house, or having to worry about keeping up repayments on an outstanding mortgage, is an attractive and popular proposition.


A new study has highlighted the reasons more homeowners than ever are choosing to release property wealth:

· 34% say they plan to use the money to clear their remaining mortgage, and another 26% will be settling other debts.

· 1 in 5 stated they would use the money to help a child or grandchild get on the property ladder.

· 31% will primarily use the money to invest in home improvements, and get their house ‘retirement ready.’


Clearing debts and supporting younger relatives with ‘early access to their inheritance when they can really use it’ have always been popular reasons for choosing equity release.

However, it’s interesting to see the growing number of people stating they would use the money to improve their homes, and create a more comfortable retirement. This suggests more customers are approaching equity release as a way to enjoy their money while they can, rather than as a method of addressing pressing financial issues.


Why is equity release so popular right now?


We’re putting it down to the good health of the property market, and the economic recovery, in general. Not only has that meant higher valuations are increasing the lump sum amount customers are getting from their lifetime mortgages, but it’s also reducing the overall debt.

That’s thanks to the nearly all-time low interest rates available on equity mortgages right now. And because these products offer lifetime fixed rates of interest, it won’t change if the base rate rises.


Though customers won’t have to repay the equity loan value back in their lifetime, this means when the house is finally sold, and the value is repaid, there’s more chance of something being left over for the inheritance.


However, it’s important to remember those interest rates could soon start to rise, as the economic impact of the pandemic recovery hits home.


Interested in exploring how equity release could support your lifestyle or financial commitments during retirement? At Evolve Lifetime, our friendly and expert team can help you assess whether this is the right choice for you, and ensure you find the best product for your needs. Book your FEE FREE consultation today.


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