Taylor Scott International News
Equity release lending in the UK has seen its biggest rise for 11 years with levels up by £68.3 million in the third quarter of 2015 compared with the previous quarter. The Equity Release Council, which issued the figures, says that it is clear that more and more home owners over the age of 55 are making use of their housing wealth to support their finances in later life. The third quarter saw the highest annual growth rates so far in 2015 and the number of new plans exceeded 6,000 for the first time since the fourth quarter of 2008, meaning that people are withdrawing a record £5 million of housing wealth every day. Total lending in the third quarter rose 21% year on year, compared with 18% annual growth in the second quarter and just 3% in the first quarter, to reach £452.6 million. In doing so, it set a new lending record for a second successive quarter. There were 6,049 new plans taken out in Q3 2015, representing a 12% increase on the second quarter and the volume of new plans was up 9% year on year, the strongest figure of 2015 to date, compared with 3% annual growth in the second quarter and 2% in the first quarter. Growing demand for equity release to help boost retirement incomes and meet later life expenses means lending for the first three quarters of 2015 already exceeds the 2013 annual total at £1.16 billion compared to £1.07 billion, and is within £220 million of the record annual total of 2014 which was £1.38 billion. The data also shows that lending via drawdown lifetime mortgages reached a new high in the third quarter, rising 18% year on year from £231.6 million in quarter two of 2015 to £266.8 million. The Equity Release Council said that drawdown products have become increasingly popular since their introduction in the mid-2000s as equity release customers took advantage of the opportunity to boost their income with regular instalments. The value of lending via lump sum lifetime mortgages also increased by 18% year on year in to reach £183.5 million, the largest figure since the fourth quarter of 2006 when it was £204.7 million. Lump sum mortgages can prove popular for customers who have a larger one-off cost to cover, such as clearing an outstanding mortgage or making home improvements. Despite accounting for less than 1% of the total market, lending via home reversions almost tripled from £632,647 in the second quarter of 2015 to £2.37 million in the third quarter. ‘Appetite among over 55 home owners for tapping into their housing wealth continues to grow. There is increasing awareness that equity release can offer many benefits in later life by providing people with extra income or the means to meet other costs and expenses,’ said Nigel Waterson, chairman of the… Taylor Scott International
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