Equity release lending for 2019 near £4bn

Equity release lending remained stable at £3.92bn in 2019, according to the Equity Release Council’s latest figures.

The total number of customers served reached a record high of 85,497 in 2019, of which 44,870 took out new plans.

In addition, the number of returning drawdown customers also increased, rising by 3,676 over 2019, representing an 11 per cent uplift. The number of further advances/ releases rose by 557 over the same time frame, a 15 per cent increase.

Drawdown mortgages retained the top spot as the most popular product among older homeowners, with 64 per cent of new customers opting for this product type over a lump sum deal.

The average customer unlocked £63,963 through drawdown lifetime mortgages in 2019, a 0.5 per cent fall on 2018.

Meanwhile, the average customer unlocked £97,282 through lump sum lifetime mortgages in 2019, a 2.4 per cent increase on 2018.

Equity Release Council chairman David Burrowes says: “After a period of steady growth, the market has reached a point of consolidation in 2019 with lending volumes in line with 2018.

“The sector enters 2020 in a strong position with updated standards and a greater number of diverse members signed up than ever before. Looking ahead, we will continue to work with stakeholders to ensure consumers are able to access the best advice while ensuring joined up financial planning so that equity release remains a key consideration in mainstream retirement planning.

“Previously viewed as a niche product to support people’s retirement plans, the untapped potential of equity release is now being recognised. This comes as a growing number of customers are recognising the important role property wealth can play in meeting their retirement needs.

“This has been driven by competition, falling interest rates, increasing numbers of flexible and innovative product options and supported by rigorous standards in the market.”

Just Group group communications director Stephen Lowe says: “Last year was marked by considerable political uncertainty but despite this total lending for the year held steady, indicating that the underlying need for people to use the equity in their homes remains consistent.

“From the consumer and adviser point of view it has been an excellent year with greater competition between providers and increasing product flexibility so that it is easier than ever to tailor plans to needs… we are optimistic for 2020 because the underlying drivers of the market remain positive.”

Legal & General Home Finance chief executive Claire Singleton adds: “While 2019 was not witness to some of the growth trends we’ve seen in previous years, lifetime mortgages still remain one of the fastest growing parts of the mortgage market… a four-fold increase in growth over the past decade is transformational.

‘‘The reality is that equity release now forms a core part of the contemporary at-retirement sector. Across the UK, thousands of people are continuing to unlock the value in their home.”