"Growing choice and flexibility has propelled equity release into the mainstream consciousness"
The rise in activity during Q2 was driven by 11,295 customers taking out new plans, compared with 10,195 in the previous quarter and 8,454 a year earlier.
Total lending between April and June increased by 12% compared with Q1 and by 39% year-on-year.
More than three in five (62%) new customers chose drawdown lifetime mortgages, while 38% chose a lump sum mortgage to receive a single payout instead, the largest share since Q1 2017.
The number of returning drawdown customers making withdrawals from their agreed ‘reserve’ funds also rose year-on-year in Q2. However, customers taking further advances on top of an existing plan dropped by 9% from 1,002 in Q2 2017 to 910 in Q2 2018.
Total lending of £93m to returning drawdown customers was the largest quarterly amount on record – a result of the growing number of customers with these products.
Home reversion plans continued to make up fewer than 1% of new plans taken out in Q2 2018, although lending in this part of the market exceeded £1m for the first time in two years since Q2 2016.
David Burrowes, chairman of the Equity Release Council, commented: “The social utility of housing wealth is increasingly recognised at a consumer, industry and policy level. Property wealth has an important role to play as part of the solution to many pressing socio-economic issues, from boosting retirement incomes to funding social care and easing intergenerational pressures by helping people to pass on a ‘living inheritance’.
“Consumers are releasing money from their homes for a variety of reasons, and features like downsizing protection and repayment options mean today’s equity release product range is designed to evolve as people age and circumstances change. Growing choice and flexibility has propelled equity release into the mainstream consciousness, and it is crucial that consumers are encouraged to weigh up all the choices available to them, to help create a rounded approach to later life planning that considers property alongside pensions and other assets.”
