The latest equity release figures show a rise in customer numbers and a huge increase in lending in the third quarter.
This shows that consumers are becoming increasingly aware of the benefits of accessing the money tied up in their home, which can help them have a more comfortable retirement. Or perhaps people are being forced to borrow more to cope with spiralling living costs.
SHIP, the equity release provider trade body (which represents over 90% of the market in terms of volume) said its members made new advances of £206.2 million in the third quarter, up 12% on the previous quarter and the highest level of lending seen since the start of last year.
The number of equity release customers also grew by over 10% to 4,148 from 3,710 in the second quarter.
This increased awareness among consumers continues to be led by the adviser market, with intermediaries accounting for 88% of new business, with 12% of customers buying equity release direct from a provider. The share of equity release business coming through intermediaries has remained stable since the last quarter.
Product Types Remain Steady
The flexibility of drawdown lifetime mortgages remained the most popular this autumn, as it continued to account for the majority of market sales 61% (£126 million). This is followed by lump sum lifetime mortgages at 36% (£75 million), with home reversion schemes accounting for 2% (£5 million) of all sales in the third quarter.
With a new breed of impaired life equity release products entering the market, this rise could be attributed to people in ill health being able to raise a greater amount of equity from their home, or that people are borrowing more to cope with the rising cost of living.
Andrea Rozario, director general of SHIP, said: "This has been an excellent quarter for the equity release market. Considering the wealth locked up in a property as part of general financial or retirement planning is essential, as it will continue to be the greatest asset most people have as they approach retirement."
"While it is unlikely that we will see an immediate return to business levels recorded prior to the recession, we are confident that the market has started to turn a corner and we will return to more typical trading conditions. The UK population is ageing and with insufficient pension provision and the prospect of meeting significant care costs, we expect the demand for equity release products to increase significantly over the next few years."