Homeowners unlocked more than £934 million of property wealth in the first six months of the year, new figures show.
According to Key Retirement, homeowners benefitted by £76,300 each, an increase of £7,850 on the same period last year.
Its Equity Release Market Monitor, shows total property wealth released between January and June rose 24% to £934 million from £753 million, while the total number of plans jumped 11% to 12,246 from 11,007. This puts the market on track to exceed £2 billion for the first time.
Key said rising house prices were helping to drive confidence, with the average property value of homeowners using equity release plans rising 16% to £307,021 from £271,248.
Equity release gives you access to the wealth tied up in your property without having to sell or move home. It is designed for older homeowners who own their property outright or have relatively small mortgages to pay.
You can borrow against the value of your home, sell it or part-exchange it for a lump sum or a regular monthly income.
A lifetime mortgage is a long-term loan which you can use to extract your funds in a single lump sum or in smaller amounts over time through what is known as drawdown. Home reversion plans allow you to access all or part of the value of your property while retaining the right to remain in it rent free.
Dean Mirfin, technical director at KeyRetirement.com, said: “The equity release market is hotting up, with more mainstream lenders entering the market and more asset-rich homeowners looking to unlock the wealth from their homes in the face of declining annuity rates and continued low interest rates, which hit pensioners the hardest.
“Pensioners who are now considering their home as part of their retirement portfolio are benefitting by £76,300 each, this by far outstrips the size of the average pension pot and provides an important income boost for pensioners who need to secure more funds for their retirement.”
The findings reveal wide regional variances ranging from average releases in East Anglia of £67,000 to over £184,000 in London.
Money continues to be used to improve standards of living in retirement, with 65% of customers using some or all of their cash for home and garden improvements. Nearly a third (29%) used their property wealth to pay for holidays. Family and friends also benefitted, with 24% of over-55s treating or helping their family and friends.
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