A record amount of housing wealth was unlocked by homeowners in 2015 of £1.61 billion through equity release plans, new figures show.
According to the Equity Release Council, equity release lending was up 16% from £1.38 billion in 2014, with homeowners taking out £961 million through drawdown.
More than 22,500 new plans were agreed last year, the highest number since 2008.
Annual equity release lending has more than doubled in the last four years and now exceeds its pre-recession peak of £1.21 billion by 33%.
Last year, drawdown lifetime mortgages accounted for two in three new plans agreed, while lump sum lifetime mortgages made up 34%, while home reversions were below 1%.
Nigel Waterson, chairman of the Equity Release Council, said: “Housing wealth is often people’s greatest asset and it makes sense for equity release to be on every homeowner’s checklist to consider as part of their retirement and estate planning.
“At the same time, it is not suitable for every circumstance, which is why professional financial advice and independent legal advice are essential so that customers understand how the products work, and what they can offer. Supporting advisers as the market grows will be a top priority in the year ahead.”
Simon Chalk, equity release expert at Age Partnership, said that the 9.5% house price increase last year made people’s homes “potentially their greatest asset.”
“During the year, more over-55s benefitted from their increased housing wealth than before as annual equity release lending reached a new high.
“The strong growth in the market is set to continue into 2016 as house prices see no sign of slowing down and people become more aware of the importance of their housing wealth – which is set to double to almost £2.5trillion by 2035. This is also coupled with the reality that the low base rate we have had since the banking crisis, won’t last forever which will inevitably mean mainstream mortgage rates rising, and perhaps moving closer to Lifetime Mortgage fixed interest rates.”
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