Nigel Waterson, Chairman of the Equity Release Council, comments:

“2016 marks the 25th anniversary since the first industry Standards were created for equity release in 1991. Since then, nearly 370,000 people have taken out an equity release plan from a Council member, drawing on nearly £18bn of housing wealth.

“Equity release allows people over the age of 55 to withdraw some of the value in their home while remaining in it, without having to sell up and downsize. This can be an invaluable option for older people, especially those who are asset-rich but cash-poor. The loan is then subsequently repaid when the homeowner dies or goes into long-term care. Lifetime mortgage plans approved by the Equity Release Council come with a host of protections and guarantees, including the no negative equity guarantee – which means borrowers will never end up owing more than the value of their home – the right to tenure, and the assurance that that all customers must first receive independent legal advice as well as regulated financial advice.

“The type of product recommended for you will depend on a detailed assessment of your circumstances and your reasons for seeking to release equity. The most popular type is a lifetime mortgage, where a homeowner borrows against the value of their home in exchange for either a one-off lump sum or a drawdown product which allows for multiple withdrawals which can be used to boost regular income or meet a series of expenses. The Equity Release Council’s most recent market report reveals that drawdown plans are the most popular form of lifetime mortgage product, with 67% of plans falling into this category. A home reversion plan is another type of equity release product, which see homeowners sell all or part of their home to the provider while keeping the right to live there until they die or go into care.

“With house prices growing faster than other sources of pensioner wealth, a rising number of homeowners can take advantage of equity release. The sector has been growing at an impressive rate, with quarterly lending passing the £500 million mark for the first time in Q2 this year as more people look to tap into their home’s value. Improving product choice and flexibility has been a key driver of this growing popularity. Research from Moneyfacts in March revealed that the number of products has more than doubled from three years ago, allowing consumers to choose from a greater range of products suited to their specific needs. Furthermore, average equity release interest rates fell further than any other category of mortgage products during the first half of 2016 – making them even more attractive to consumers*. Another big part of the appeal is that the money accessed via equity release can be used for a number of reasons of the customer’s choosing: many use it to supplement their retirement income or to make improvements to their home, and a growing number are also using it to help younger family members onto the property ladder.” 

-ENDS-

* The Equity Release Market Report – Autumn 2016 revealed that the average lifetime mortgage rate fell to 5.96% in July.

For further information, please contact:

Victoria Heslop or Will Muir at Instinctif Partners, on 020 7457 2020 or email

[email protected]

About the Equity Release Council – www.equityreleasecouncil.com 

The Equity Release Council is the industry body for the equity release sector, which represents over 400 members including providers, qualified financial advisers, solicitors, surveyors and other industry professionals.

It works to ensure a safe equity release market for consumers, by operating rigorous Standards for the provision of advice and products which guarantee security of tenure and financial protections. 2016 marks the 25th anniversary since the first industry Standards were created for equity release in 1991. Since then, nearly 370,000 people have taken out an equity release plan from a Council member, drawing on nearly £18bn of housing wealth.

The Council also works with consumers, industry and policy makers to improve awareness and understanding of equity release and the potential for housing wealth to help solve many of the financial challenges facing people over the age of 55 across the UK.