Equity release market expands toward pre-coronavirus levels

16 December 2020

A steady uptake in equity release 

Like most sectors, the first lockdown meant that the equity release industry took a hit during Spring 2020. Over Summer, we were pleased to report that the market had started to bounce back, now, we’re thrilled to see that the trends are indicating that the amount of equity being released is climbing back to pre-COVID heights. 

The latest report by the Equity Release Council shows that the amount of equity being released across the UK is rising; the report looks at the third quarter (Q3) of 2020 and the trends across the market as a whole. The previous quarter had seen the market trying to recover from the hit at the end of Q1 when the equity release market ground to a halt as initial lockdown restrictions prevented new business until the sector adjusted to the new, Covid-secure ways of working. 

We’re pleased to see that during Q3 the number of new equity release plans agreed (10,351) increased by 41% from the previous quarter as national lockdown conditions were eased’. Whilst the report does highlight that equity release is still down 9% on this time last year, it is clear that the trends are heading in the right direction and it won’t be long until the market has returned to its pre-COVID levels. 

Equity release helping families during the crisis 

The report revealed that ‘£963 million of property wealth was accessed in Q3 by new or returning customers – up 38% from the previous quarter and down 3% year-on-year’. This money – which was previously tied up in UK properties – is now making a real difference to households up and down the country. 

These trends mirror what we’re experiencing at 55Plus Equity Release, with lots of customers eager to explore releasing equity to ease the financial challenges that they and their loved ones are facing during these difficult times. The Office for National Statistics has reported that: since March 2020, the number of payroll employees has fallen by 782,000’. There are also many who are still in employment, but who are struggling on a reduced income, either through the Furlough scheme, reduced hours or business uncertainty. To combat this, people are turning to equity release to help give them, or their loved ones, financial peace of mind during these tough times.

Why we’re proud of the equity release sector 

Our founder and Managing Director, Jan Johnson, commented: It’s really promising to see that the equity release market is nearly at pre-coronavirus levels, it shows that people have faith in the industry and the products we have available. It’s going to be great to see what 2021 has in store for the sector.

I’m not surprised that the latest data shows that the amount of equity being released experienced a surge this quarter; our phone is ringing constantly, with people looking for help see them through these uncertain times. 

We’ve also seen a rise in the number of people looking to release equity so that they can access home care, as opposed to going into a care home; this is undoubtedly the result of people feeling anxious about going into a care facility while coronavirus levels remain high. With this said, I’m pleased to see that the developments on a COVID-vaccine are looking promising, and hopefully in 2021 we can start to return to a more normal way of life.”

We’re proud of how the equity release sector has adapted in response to the coronavirus crisis and that, as a result of this flexibility, the market is nearing pre-COVID levels. If you would like to see whether releasing equity could help see your family through financial hardship, please get in touch. 

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