The equity release sector has a busy end of 2020
3 March 2021
Over 55s turning to equity release
The latest figures from the Equity Release Council show that the fourth quarter (Q4) – October, November and December 2020 – was a busy one in the equity release sector. It’s been reassuring to see that this third lockdown hasn’t affected the sector like it did during the first lockdown in March 2020, when the industry rambled together to adapt to a new way of doing business.
In fact, Q4 was the busiest quarter for the equity release sector, with 11,566 new plans being agreed. The total amount of wealth accessed by both new and returning equity release clients was £1.16 billion, funds which will go a long way in improving the lives of homeowners over 55 during these difficult times.
Other interesting trends that the report revealed were that the average sum of money for each plan was up 4% from Q4 of 2019, and the average drawdown lifetime mortgage for new customers had risen by 6% for the total amount of money released.
Looking to 2021
Although Q4 was an extremely productive time for equity release specialists, the dip in equity release plans during the initial lockdown in 2020 has meant that the overall equity released in the UK during that year was still 10% lower than in 2019. Now the sector has adapted to remote working, it’ll be exciting to see what this new year brings and whether it’ll be a record-breaking one.
As a company, we’re abiding by government guidelines and working from home. We recognise the huge responsibility placed on us as professionals working with people who may be at an increased risk if they contract coronavirus. In light of this, we’re conducting all of our meetings with clients virtually or over the phone. Of course, we absolutely miss meeting our customers face-to-face and chatting with them and their families over a slice of cake, but we realise these measures are short-term and hopefully we’ll return to normality as soon we’re allowed.
Why was so much equity released at the end of 2020?
It’s hard to know exactly why so many people decided to release equity during Q4 of 2020, but some of the reasons we’re hearing regularly with our customers are:
- To help navigate through coronavirus uncertainty: Coronavirus has resulted in redundancies, furlough, general uncertainty and for some increased business fragility. We’re talking to many people who’re looking to release equity to see them through these hard times.
- To help friends and family: Equally, a lot of parents, grandparents and great-grandparents are coming to us to try and help their loved ones who’re going through financial uncertainty.
- Low rates: The low interest rates that are currently common within the market mean that, financially, the time has never been better to release equity.
- To help realise their dreams: And, of course, we’re still getting lots of people who want to release equity for common reasons, such as to get a new kitchen, pay for home care, or pay off an existing mortgage.