This is still down 9% year-on-year however, and represents the second slowest quarter since the start of 2018.
Just shy of 6,700 customers returned during the quarter to take further drawdowns from their agreed reserves, an increase of 19% from the previous quarter but down on the same point last year by 30%.
In total £963 million of property wealth was unlocked over the quarter. This is only marginally down (3%) on the same period in 2019, and represents a stark jump of 38% on the previous quarter.
David Burrowes, chairman of the Equity Release Council, said that there appeared to be a “steady return to something closer to normal activity” over the summer, following the impact of Covid-19. He added that equity release needs to be a carefully considered choice at the best of times, but this year’s “unprecedented events” make it even more important for people to weigh their decisions through financial and legal advice, as well as talking it through with those closest to them.
Burrowes continued: “Despite the uncertain climate, the market has adjusted well to the challenges of operating safely in a pandemic. Desktop property valuations have been used selectively, solicitors have taken extra steps to maintain consumer protections when advising remotely, and product pricing has remained competitive.
“Looking ahead, the key market drivers remain in place: people are living longer and retirement finances are increasingly squeezed as generous final salary pensions edge further to extinction. Many older households are already facing a situation where their expenses outweigh their disposable income, which makes access to property wealth an important pillar to support later life living standards.”
Dave Harris, CEO of more2life, said that the hard work of key players within the sector over the past quarter had “gone a long way” in stimulating activity post-lockdown, and praised the equity release market for adapting to the challenges posed by 2020.
He continued: “While all choices around housing equity need to be made taking into account both a client’s long-term and short-term needs, it is crucial that people realise that they can use their housing equity at the moment if they need to.
“Adviser support will be key here, and it will be up to lenders to ensure that engagement and education for the intermediary community is at the top of the agenda so that they are able to help older clients with some of the more difficult financial choices they may need to make.”
