Equity release peaks in 2015

January 26, 2016 by Brendan

Rates

Data released by Key Retirement suggests the number of people releasing equity in their homes surged to a new high during 2015.

The market for equity release reached £1.71bn last year, according to the research, an increase of 24% on the figure from 2014, which was £1.38bn. The Equity Release https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Monitor reported that the average amount withdrawn from property by pensioners in 2015 was £72,000 per household. In London the figure rose to £128,000.

According to a statement released by Key, one of the main factors behind the increase is the rising property prices. The survey revealed that 61% had used the money to pay for home improvements, while 30% had used the money to pay for a holiday. Funding retirement was the main reason for equity release. Debt was also a considerable factor, with almost a quarter using the cash to pay off their mortgage, and 31% using the funds to consolidate loans and credit card debts. Dean Mirfin, the technical director of Key Retirement, said:

“Property wealth is making a massive contribution to retirement income and planning with pensioners releasing a record £4.7m a day from their homes.”

Mirfin added that people are now more likely to consider their property as part of a retirement fund, especially following the introduction of pension freedoms. The choice of solutions for income during retirement has increased, which includes equity release plans.

Before considering equity release, it may be advisable to seek advice from a CeMAP trained mortgage adviser, who may be able to offer an alternative solution.