Older homeowners saw their property wealth jump by almost a third to £1.9bn in the first six months of the year as the equity release market recovered from the series of lockdowns caused by the pandemic.
This sum is 32% up on the £1.7bn released in the first half of 2019, prior to the pandemic, according to equity release adviser Key.
Average customers received £94,982 as rising house prices benefitted equity release customers.
New plan sales rose by 3% to 20,445 in the first half of this year.
More than half of the proceeds of equity release, or 52%, was used to clear mortgages, 45%, and manage unsecured debts, 7%, while 23% was used to help family and friends – notably for help with house deposits as buyers rushed to beat the end of the stamp duty holiday, says the report.
Around 71% of customers took out drawdown plans in the first half of this year with customers taking an initial average amount of £56,744 while reserving another £666.4m for future use.
During the six-month period, the data shows 14,589 customers returned to take out an average of £13,765 to support their retirement finances and the number returning to take out further money is expected to continue to grow.
Key chief executive Will Hale says: “The equity release market is benefiting from the success of the vaccination programme putting the country back on the delayed road to recovery with total value released up strongly and the number of plans taken out increasing.
“Big ticket items like repaying outstanding mortgages, managing unsecured debt and helping family members get their foot on the property ladder is what motivates customers.
“This is intergenerational fairness in action and equity release customers provided almost £1m per day in deposits during the stamp duty holiday.
“Drawdown plans remain dominant and with over 710 different products on the market, those who choose equity release to manage their borrowing benefit from more flexibility than ever – including the opportunity to make ongoing interest and fee-free capital repayments.”
