Equity release market remains strong despite dip, Equity Release Council says
The first quarter of 2021 saw a fall in the amount of equity released by customers against the fourth quarter of 2020, according to new statistics released by the Equity Release Council (ERC).
Indeed, the total amount released fell from £1.16bn to £1.14bn between the two quarters, but the ERC said in a statement that, despite the dip, consumer and market confidence was higher during the UK’s latest lockdown and that it had become ‘more robust’ than it had been previously.
However, Q1 2020 also saw the number of customers served fall from 19,333 to 16,527, and this has largely been attributed to the strict lockdown measures exacerbating normal seasonal trends.
David Burrowes, chairman of the ERC, said that while the market had seen a reduction in terms of both customer numbers and the total amount of equity released, the data had still been following similar, steady trends to those observed before the pandemic.
He added: “The market has proven to be robust and applied lessons learned in the first lockdown to maintain access to property wealth for those customers who need it, guided by multi-layered financial and legal advice. Decisions to release equity are not made in isolation of wider developments in the property market.
“The resilience of house prices means that, for many older homeowners, property continues to be the most significant asset at their disposal and a viable route to boosting their income from pensions and savings, or gifting a ‘living inheritance’ to family members for their own use such as for a house deposit.”
Stuart Wilson, corporate marketing director at more2life, said that the figures are indicative of a strong start to 2021. He added: “With total quarterly lending up year-on-year and over 10,000 new plans agreed in Q1, it’s clear that lenders and advisers have continued to provide excellent support for equity release borrowers despite the challenges presented by the Covid-19 crisis. This is down to the continued cooperation of lenders, advisers, trade bodies and providers in the lifetime mortgage market, with all parties having played a strong part in driving activity over recent months.”