Equity release to buy property more than doubles
5 October 2021
Last year’s stamp duty holiday helped spark a major upturn in the number of houses purchased using equity release, giving homeowners over 55 the option to pursue their dream – or second homes that better suit new lifestyle choices as the pandemic changed how we work and live.
According to new research from More2Life, property purchases funded by equity release increased by 208% between H1 2020 and H2 2020 – more than doubling across the period. This was part of a 116% year-on-year increase in the number of homeowners releasing equity to buy new properties, with purchases funded by equity release 234% higher by the stamp duty holiday deadline than at its beginning.
Why did equity release funding for property purchases double?
Whilst there are many possibilities as to why the number of homeowners over 55 chose to release equity to purchase new property over the stamp duty period, some of the key reasons could be:
- · Reduced rates of tax – the stamp duty holiday allowed homebuyers to save up to £15,000 in tax
- · Rising house prices – a 5.4% increase in house prices over 2020 meant that homeowners over 55 may have seen new value in their current property
- · Home improvements to meet our new lockdown lifestyles – the extended periods of time spent at home over lockdown made homeowners over 55 more aware of shortcomings within their current property – or moved optional extras to top of their priorities. Garden room, anyone?
- · Supporting loved ones to buy their first home– with rising property prices giving established homeowners more equity in their homes, releasing some of it can help support younger generations take their first step on the property ladder
- · Moving to a better home or a better location – whether it’s for a dream home, closer to family, or for a holiday property (especially with the increased demand for staycation boltholes), releasing equity can help boost available budgets.
Equity release continuing an upward trend
Our founder and Managing Director, Jan Johnson, commented: “The stamp duty holiday saw a significant increase in the housing market in 2020 – so it’s no surprise that the amount of equity released to help over 55’s afford their next dream property doubled. Our expert equity release advisers at 55Plus Equity Release put in extremely long hours to keep up with demand and help our clients beat the stamp holiday duty deadline.
“But even though the deadline has passed, the amount of equity being released to buy houses has continued to rise, showing that property buyers are still considering equity release as a viable option to finance their next purchase.”
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