The number of homeowners are releasing equity from their homes has doubled for many UK regions in the last five years.
Data from the Equity Release Council reveals demand for equity release using lifetime mortgages by homeowners has more than doubled over five years with East of England rising 158% in the last five years.
Older homeowners with considerable value in their property offers the equity release mortgage buyer access to cash tax free to improve your quality of life, pay for care at home or even buy a dream home in retirement.
During 2018 there were 25% more homeowners taking equity from their homes compared to 1% more first time buyers, 10% more remortgage buyers and -2% fewer home movers.
For buy-to-let investors the number of new purchases has reduced by -11% although there were 11% more landlords remortgaging their properties.
Equity release doubles in five years
For the five years since 2013 all UK regions have seen a strong rise in the number of homeowners releasing equity with demand doubling in many regions including the South East rising 143% and London up 138%.
The following table shows the rise in the number of lifetime mortgages by homeowners releasing equity over one and five years for UK regions.
| Region | 5-year growth | 1-year growth |
|---|---|---|
| East of England | 158% | 15% |
| South East | 143% | 14% |
| London | 138% | 12% |
| Northern Ireland | 112% | 21% |
| East Midlands | 100% | 26% |
| South West | 99% | 14% |
| West Midlands | 80% | 20% |
| North East | 67% | 16% |
| Yorks and the Humber | 66% | 18% |
| Wales | 64% | 17% |
| Scotalnd | 62% | 12% |
| North West | 61% | 17% |
Other regions where demand has doubled is Northern Ireland rising 112% and East Midlands up 100% over five years.
Over the last year there has been double-digit growth with East Midlands rising 26%, Northern Ireland up 21% and West Midlands higher by 20%.
Family members can help with the deposit to buy a property for a first time buyers by releasing equity using a lifetime mortgage. With provider fixed interest rates of under 3.0% the children can choose to cover the interest payments to reduce the costs.
Find out what are the costs to release equity to gift a deposit to children to buy a home and the interest payments using this link:
Free equity release calculator with instant figures to give a deposit to children.
Between July and December 2018, there were 43,879 homeowners aged over 55 accessed money from their homes including 24,907 new plans agreed with providers.
David Burrowes, Chairman of the Equity Release Council said, customers now have access to hundreds of product options combining various features to suit different individual circumstances.
There are now 221 products available to homeowners with 52% offering protection if you downsize your home and 87% allowing you to make voluntary partial repayments with no early repayment charge.
Busiest start recorded for 2019
The first quarter of 2019 was the busiest ever recorded with 20,397 homeowners accessing equity using a lifetime mortgage of which 10,854 were new plans.
Total values for 2019 was £936 million an increase of 8% over the same quarter in 2018 and 187% higher than the figure for 2015 of £326 million.
Homeowners can access cash as a lump sum with 36% of all plans arranged on this basis and the most popular is to drawdown cash over time arranged by 64%.
Of the lump sum plans the average released for new plans during the first quarter this year was £97,763 compared to the average of £62,416 for drawdown plans.
There are a wide range of reasons for accessing equity from your home with many homeowners paying off debt, making home improvements or improving their standard of living.
If you have an interest only mortgage the lender may force you to repay the loan when you reach a certain age and rather than downsizing, the equity release buyer can agree a lifetime mortgage.
Cash received using equity release is tax free and can be gifted to family or friends, used for home improvements or even for replacing an existing equity release plan.
What are your next steps?
Our London City Mortgage advisers can recommend the best lifetime mortgage and the specialist legal advice if you are an older homeowner considering equity release.
Learn more about the mortgage offers from providers and interest rates to release cash to improve the quality of life with this link:
Free equity release quote with the best products to release cash and improve your lifestyle.
Talk to an LCM mortgage adviser to find the most suitable product releasing money for any purpose. Learn more by using the equity release calculator, property value tracker chart and mortgage costs calculator.
