There has been a rise in the number of people taking out equity release to buy a new property, according to customer analysis.
Retirement Advantage discovered, between April and the end of June this year, one in ten of its customers took out an equity release loan in order to fund a new property purchase compared to 6.6% in 2017.
And it believes many were making the purchase in order to make long-term investments as opposed to downsizing.
Alice Watson, head of product and marketing at Retirement Advantage Equity Release, said: “We’ve seen plenty of headlines suggesting the property market has slowed in recent months. Not for over-55s, it seems. For this cohort, our figures suggest they are increasingly keen to make property purchases.
“It is unlikely this is down to a wave of downsizing. We know from research we conducted earlier this year downsizing is not popular – only one in five older people say they’re prepared to consider it.
“Instead, the increase suggests that the attraction of property as a long-term investment endures. For over-55s keen to own new property, wealth tied up in their existing home can make a significant financial contribution.
“Using existing property wealth in this way also offers further evidence that equity release customers today are proactively using the products to make major financial decisions. This reinforces the rapid maturity across this booming sector.”
Other uses for equity release
The study also revealed even greater numbers of over-55s were using their property wealth to fund a diverse range of lifestyle areas.
It found 14.1% of customers used equity release to buy a car between April and June of 2018 and nearly one in four used the money to go on holiday.
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