Continued Rise In Equity Release Loans
Last year was a particularly poor year for the equity release loan and lifetime mortgage market. Falling house prices reduced consumer confidence and a lack of wholesale funding from lenders meant that loans were harder to obtain and more expensive.
However, so far this year there has been a significant upsurge in the number of retired home owners who are taking out an equity release loan and freeing up the capital which would otherwise remain locked up in their property.
According to the latest figures from equity release specialist, Key Retirement Solutions, the amount of funding being taken out of through an equity release loan has increased by 18.46 per cent over the course of the first three months of this year, compared with the same period last year.
The figures show that around £216.9 million has already been released from property so far this year and looks set to continue increasing as the year progresses.
The most popular use of equity release loans is still for home improvements, such as a new kitchen, bathroom, or garden improvements, with around 58 per cent of all new loans being used for this purpose.
However, there has also been a significant increase in the number of people taking out an equity release loan in order to help family or friends financially, for things like helping children or grandchildren raise the necessary deposit to buy a house and obtain a home owner loan of their own.
Dean Mirfin of Key Retirement Solutions commented on the increase, he said “The equity release market is healthier and delivering strong returns for retired home owners as confidence increases which in part has been helped by the gradual property market recovery.”
