21 April 2020
Spring 2020 Market Report press notice
January 2020 saw average equity release rates drop to record low of 4.48% as product options surpassed 300, according to the 2020 Spring Market Report.
Other key findings include:
- Average equity release rates fell to record low of 4.48% in the second half of 2019, while two out of five products have rates lower than 4%
- Increasing choice of products offering interest-serviced options, partial repayment flexibilities and downsizing protection
- Wider later life market expands as total sales of all mortgage products to customers aged 56+ rose by 25,212 between H1 2015 and H1 2019
- Over-55s account for 75% of UK population growth, projected to increase by 3.7m by 2030
- 63% of new customers opted for drawdown lifetime mortgage products – taking smaller amounts up-front than lump-sum products
- Older homeowners are continuing to recognise the utility of property wealth, as £1.81bn was unlocked in H2 2019
- 2019 market buoyed by strong competition and reinforced by robust safeguards.
David Burrowes, Chairman of the Equity Release Council said: “Hopes that the UK would leave behind the political and economic uncertainty of 2019 have been rapidly overtaken in recent weeks by the national and global response to the coronavirus outbreak.
“Reflecting on 2019, the equity release market remained robust, as for a second year running older homeowners unlocked nearly £4bn of property wealth. While uncertainty becomes the norm, property wealth will inevitably continue to play a role over the months and years to come, to help meet the wide-ranging needs of the UK’s ageing population.
“The increasing diversity of firms in the market reflects the wide range of consumer needs which property wealth is helping to address. It is also a sign of the greater frequency with which the option of releasing equity is coming up in retirement planning conversations.
“Equity release is a long-term commitment that can only be made after careful consideration, regulated financial advice and independent legal advice. Strong consumer safeguards will continue to ensure equity release is chosen for the right reasons, with applications vetted prudently and carefully by weighing up both short- and long-term needs”
To read the full press notice click here.
To download the report itself click here.