The value of equity released at the start of this year fell slightly on a quarterly basis but rose when looked at annually, a new report from the Equity Release Council shows.
During the first quarter of 2021, £1.14bn of property value was released compared to £1.16bn at the end of 2020.
In Q1 2020, £1.06bn was released, meaning that today’s figures show 7% growth.
Meanwhile, 10,030 new borrowers signed up for an equity release plan at the start of 2021 compared to 11,079 in Q1 2020 while, in total, the market served 16,527 new or returning customers, down from 19,333 in Q4 2020.
This made for the quietist start to a year for this metric since Q2 2017.
And existing customer behaviour bent conservative as the lockdown continued into the year: there were just 5,566 returning drawdown borrowers during the first quarter of this year – down 18% on Q4 2020 and 25% annually.
ERC chairman David Burrowes comments: “The market has proven to be robust and [to have] 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.”
Just Group communications director Stephen Lowe adds: “Momentum usually builds through the year, so it is positive to see such a good start in the first three months.
“The effects of the lockdowns may linger as people reassess their financial circumstances. But… we are confident that the appetite for using housing wealth to support retirement aspirations is set to grow in the years ahead.”
Responsible Life executive chairman Steve Wilkie adds: “Anyone who postponed taking a lifetime mortgage in the first quarter of the year was, in all likelihood, in no hurry while they watched the world stand still and their disposable income mount up. However, this missing demand won’t have evaporated entirely and we’ll see some positive swings in these figures as we progress through 2021.
“A rise in the number of new lifetime loans is likely to compensate for the dip in Q1 over the next few months, aided by increased interest in lifetime mortgages thanks to rampant house price growth, which is going to prove a boon for the sector this year.”
