A record 13,452 new equity release plans were taken out by homeowners in the United Kingdom aged 55 and above between July and September 2022 according to new data from the Equity Release Council (ERC), a trade group which lobbies for reverse mortgage equivalents in the U.K. This is according to reporting at U.K.-based property market publication Property Industry Eye.
The figure represents an 8% increase in the total number of equity release plans — sometimes referred to in the U.K. as “lifetime mortgages” or “retirement mortgages” in Europe — which also surpassed the previous record set in the final quarter of 2018 that stood at 12,891.
“The summer months have seen the equity release market resume its pre-pandemic growth trajectory, with extra protections having been added in the intervening years so all new customers can make voluntary repayments when they can afford to and reduce their overall costs,” said David Burrowes, ERC chair to Property Industry Eye. “Equity release is not an overnight purchase, and the desire to secure lower interest rates before anticipated rises is likely to have influenced customers’ timings as they completed deals from earlier in the year.”
Burrowes added that home price appreciation within the country has remained strong, indicating a more attractive proposition for equity release.
“With the value of UK homes having passed £7 trillion, people are increasingly inclined to put their property wealth to work in later life to support themselves and family in the here and now,” he said.
£7 trillion GBP currently translates to roughly $8.1 trillion U.S. dollars, according to current exchange rates.
Last year at the National Reverse Mortgage Lenders Association Virtual Annual Meeting, Burrowes spoke to American reverse mortgage professionals virtually to offer perspective on the growth of equity release in his country.
“We’re very excited about the growth prospects for equity release,” Burrowes explained last November. “And certainly, we believe we’re on the cusp of seeing some turbo-charged growth in this area. We’ve already spoken about the size of the global equity release market being over $50 billion US dollars per annum, and my colleagues on the board of European Pensions and Property Asset Release Group (EPPARG) are quite determined to make a fair share of that in Europe.”
Read the story at Property Industry Eye.