Taylor Scott International News
Equity release lending in the UK reached a new high of £1.61 billion in the final quarter of 2015 as home owners over the age of 55 unlocked a record amount of housing wealth, new data shows. Lending via drawdown products totalled £271 million between October and December 2015, the largest quarterly total since this type of lifetime mortgage first emerged in 2004, the data from the Equity Release Council sows. Some 70% new plans agreed in the fourth quarter of 2015 were drawdown, up from 63% in the previous quarter as more people opted to withdraw their housing wealth in stages to boost their retirement income as and when they need it. Drawdown lending for the whole of 2015 was also the highest on record at £961 million. It pushed total equity release lending activity by members of The Council to an unprecedented £1.61 billion, up 16% from £1.38 billion in 2014. Last year saw more than 22,500 new plans agreed for the first time since 2008. At 22%, the year on year lending growth rate in the final quarter of 2015 was the largest of any quarter last year, despite a slight dip in quarterly lending from £453 million in the third quarter to £445 million. Since falling to a post-recession low of £789 million in 2011, annual equity release lending has more than doubled in the last four years and now exceeds its pre-recession peak of £1.21 billion. Over the whole of 2015, drawdown lifetime mortgages accounted for 66% of new plans agreed, while lump sum lifetime mortgages made up 34% and home reversions were below 1%. ‘These year-end figures are the latest sign of growing reliance on housing wealth as a key pillar of later life financial planning. The rising popularity of drawdown has been one of the success stories of the last decade, and product features have since appeared allowing customers to protect a percentage of their equity as an inheritance, make part-repayments of capital or make interest repayments on their loan,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Looking ahead, the challenge is to continue developing products which meet consumer needs while ensuring that innovation is combined with protection and long- term sustainability. The work led by The Council and its members to uphold standards for equity release products and advice has been fundamental to creating a safe market for consumers, and we will continue these efforts to meet growing customer demand alongside regulators and the Government,’ he explained. ‘Housing wealth is often people’s greatest asset and it makes sense for equity release to be on every homeowner’s checklist to consider as part of their retirement and estate planning. At the same time, it is not suitable for every circumstance, which is why professional financial advice and independent legal advice are essential so that customers understand how the products work, and what they can offer…. Taylor Scott International
Taylor Scott International, Taylor Scott
