Figures out today from the Equity Release Council showed the first three months of 2021 saw £1.14bn released by 16,527 new or returning customers.
This was slightly down from the £1.16bn released in Q4 2020. However, figures represented a 7% rise year-on-year from £1.06bn in Q1 2020 as market and consumer confidence proved more robust than in the first lockdown
New customer activity in Q1 2021 cooled slightly, the Council revealed. This, it said, was driven by seasonal trends amplified by renewed Covid-19 restrictions as the number of new plans edged down to 10,030 from 11,079 in Q1 2020
With lockdown restrictions tightened, February 2021 saw the fewest new plans agreed since June 2020 before modest growth returned in March
Figures come as the product choice for homeowners seeking to release equity reached an all-time high, according to Moneyfacts.
David Burrowes, chairman of the Equity Release Council, said: “Despite ongoing uncertainty over the trajectory of the pandemic, this latest data for the early months of 2021 shows how the equity release market is following a steady course, albeit at a lower level than was the pre-Covid norm.
“The market has proven to be robust and applied lessons learned in the first lockdown to maintain access to property wealth for those customers who need it, guided by multi-layered financial and legal advice.
“Decisions to release equity are not made in isolation of wider developments in the property market.
“The resilience of house prices means that, for many older homeowners, property continues to be the most significant asset at their disposal and a viable route to boosting their income from pensions and savings, or gifting a ‘living inheritance’ to family members for their own use such as for a house deposit.”
Lower rates
Claire Singleton, CEO of Legal & General Home Finance was also positive about the market going forward especially as this year had seen the lowering of rates on equity release products.
She said this clearly made accessing property wealth a more viable option for customers who wanted to remain in their homes, rather than downsize to a smaller property.
“Property wealth will play an increasingly important role in funding future retirements, with fewer people retiring on large pensions and no debt,” she said.
“This has led to a growing acceptance of the role the home can play in boosting pension income to enjoy a fuller retirement or, as we are increasingly seeing amid the pandemic, gifting money to loved ones who may need the funds.
“Releasing equity from a property is a very important decision, and one that must not be taken lightly. The pandemic has had a huge strain on people’s finances and retirement plans, leaving many people worse off and vulnerable to financial stress.”
