Twice the Customers

According to the latest analysis by the Equity Release Council, the volume of new customers taking out equity release plans in 2017 was almost 10,000 more than in the previous year, as the number of people unlocking housing wealth for the first time increased by a third. As a source of retirement finance, equity release is now helping more than twice as many new customers as it was five years ago. More new plans were agreed in the second half of 2017 than in the whole of 2012.

All strands of equity release activity – across new customers, returning drawdown customers and further advance customers – grew in the second half of the year compared with the first, with the 14% rise in overall customer numbers driven by a 20% increase in new customers and a 19% increase in further advances. Returning drawdown activity was more consistent, with the number of returning customers rising 5% from 12,585 in H1 to 13,209 in H2.

Growing interest in the equity release market from consumers is a sign that more homeowners consider housing wealth to be a potential source of finance in later life and are finding an increasingly flexible range of products enabling them to unlock some of its value. One sign of this shifting mindset is that back in Q2 2016 just 29p of housing wealth was unlocked by over-55s for every £1 of savings accessed via flexible pension payments, following the introduction of ‘pension freedoms’ a year earlier. This rose to 38p of housing wealth for every £1 of pension payments over the whole of 2016, climbing again to 47p during 2017 and reached 56p in Q4 2017, as property becomes increasingly important as a supplementary source of retirement finance.