Unlocking money to fund home improvements is the main reason that people are choosing equity release, according to research from LV=.
Equity release lending has reached £1 billion so far this year and the need to renovate is the reason almost half (48 per cent) of all LV= equity release customers have taken out a loan.
However customers are more likely to be making essential modifications e.g. widening doorways for wheelchair access or installing a stair lift than adding a conservatory or loft extension.
The research also shows that people are using equity release to relieve pressure on the purse strings. This year one in seven LV= equity release customers wanted to use the money to top up their retirement income, with a further 9 per cent wanting to clear an outstanding mortgage and other existing debts and loans.
Financial necessity has driven much of the demand for equity release. However, treating or helping out family was the reason for 10 per cent of customers, while using the freed-up equity for a holiday accounted for 6 per cent of applications.
Vanessa Owen, head of annuities and equity release at LV=, says:
“With the reality of living on a low pension income hitting home for many retirees, it makes sense that many wish to unlock the cash tied up in their properties. At retirement, someone’s largest asset is usually their house and for those retirees who wish to stay in the home that they love, then equity release is a solution worth considering.”
Owen adds: “It is essential that retirees consider all their options and that equity release is considered alongside other retirement income solutions so that they are able to effectively plan for the future.”
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