Equity release sector has recovered from the pandemic
21 September 2021
Consumer confidence in the equity release sector
The latest report by the Equity Release Council shows that consumers have had their confidence restored in the equity release sector, as industry activity has almost reached pre-pandemic levels. Like many industry sectors, equity release had been greatly impacted by COVID restrictions, the industry had to shift to a new way of interacting and reaching its customers in keeping with social distancing and remote working recommendations.
Promisingly, the report found that over-55 homeowners unlocked £1.7bn of property wealth in total during Q2 2021, up 2% from Q1 (£1.14bn) and up 67% (£698m) from a subdued Q2 last year during the first Covid-19 lockdown. The dramatic rise in equity released in comparison to 2020 at the height of the pandemic demonstrates how well the industry has adapted to new ways of working in light of the continued pressures of the pandemic, and also in showing the faith consumers have in the sector.
Equity release as a lifeline to many during the pandemic
One of the reasons for the stark increase in the amount of equity released since the start of the pandemic has been that many homeowners over-55 are turning to equity release to support themselves through the financial uncertainty that the Coronavirus crisis has unleashed. Unfortunately, many households have been working with a reduced budget and figures show that those later in life have been made redundant disproportionately to their younger counterparts.
Another reason for equity release being relied upon frequently during the past year is the government’s stamp duty holiday, which has meant that many people have been looking to unlock money to buy additional properties or to help family get on the property ladder.
Our founder and Managing Director, Jan Johnson, commented: “It’s great to see that the equity release market is almost at pre-pandemic levels. The report offered by the Equity Release Council reflects what we’re experiencing as a company, with many new and existing customers approaching us looking to release equity to help them realise their dreams, or better support themselves through these uncertain times.”
Reasons for the rise in equity release
As well as the Coronavirus-led reasons for the rise in equity released, we’re also increasingly seeing homeowners over-55 approaching us looking to release equity for:
- Buying additional properties or a holiday home: Many homeowners are using equity release to buy an additional property, either for friends and family to enjoy, or to generate a second income
- Re-mortgaging: The main advantage that lifetime mortgages have over residential mortgages is that lifetime lenders don’t usually require you to make monthly repayments. This can be a great option if you’re currently struggling to keep up with your repayments
- Helping with home care costs: Releasing equity has enabled countless homeowners to receive care in their own home later in life
- Finances through retirement: Many older homeowners worry about how they will fund their lifestyle through retirement. Releasing equity could be an option if this is a concern for you.
If you want to learn more about how equity release might work for your individual situation, then please get in touch.
Safe consultations: socially distanced, over the phone or by video call – we are happy to hold our initial free consultations however you feel safest, in line with current guidelines.