Equity Release Loans Increasing In Popularity
Last year saw a particularly quiet year for the equity release loan market. A lack of available funding for loans from lenders and a large degree of uncertainty over house prices and the economy, put many people off taking out such a loan and several lenders withdrew from the market place altogether.
But the latest figures from equity release loan specialist, Key Retirement Solutions, have shown a significant increase in the number of equity release loans being taken out in the first three months of the year.
The new report has revealed that there was a total of £216.9 million released in new loans in the first three months of this year, compared with just £183.1 million worth of loans over the same period twelve months ago, an increase of almost 19 per cent.
The most popular reason for equity release is still for use as a home improvement loan, with around 58 per cent of all new loans being used for things such as a new kitchen, bathroom, or other home improvements.
Interestingly, the next most popular reason for an equity release loan is to help family and friends financially, with around 35 per cent of all cases being used to help family fund their own projects and thereby saving them from taking out a secured loan or personal loan in their own name.
Altogether there were 5,600 new loans offered to borrowers in the first three months of this year, with average loan size of £43,090, compared with 4,703 new loans twelve months ago worth around £44,948 each.
Dean Mirfin of Key Retirement Solutions 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. Despite falls in property values over the past couple of years many find they can comfortably raise the amounts they need from the current wealth tied up in their homes.”
