The average rates for equity release products fell to a record low of 4.48%, with 40% of plans offering rates below 4% – an all-time low for the equity release industry, the Equity Release Council’s (ERC’s) Spring 2020 report has revealed.
Older homeowners unlocked nearly £4bn of property wealth in 2019 whilst product options surpassed 300 as choice increased 42% in the past year.
David Burrowes, chairman of the Equity Release Council, said: “Hopes that the UK would leave behind the political and economic uncertainty of 2019 have been rapidly overtaken in recent weeks by the national and global response to the coronavirus outbreak.
“Reflecting on 2019, the equity release market remained robust, as for a second year running older homeowners unlocked nearly £4bn of property wealth.
“While uncertainty becomes the norm, property wealth will inevitably continue to play a role over the months and years to come, to help meet the wide-ranging needs of the UK’s ageing population.
“The increasing diversity of firms in the market reflects the wide range of consumer needs which property wealth is helping to address. It is also a sign of the greater frequency with which the option of releasing equity is coming up in retirement planning conversations.
“Equity release is a long-term commitment that can only be made after careful consideration, regulated financial advice and independent legal advice.
“Strong consumer safeguards will continue to ensure equity release is chosen for the right reasons, with applications vetted prudently and carefully by weighing up both short and long-term needs.”
The second half of 2019 saw equity release activity pick up after a quieter start to the year, as a degree of clarity returned to the UK political and economic landscape.
Having dropped back in H1, the total number of new and existing customers using equity release products to access their property wealth returned to growth in H2.
Between July and December, 44,234 customers were served, compared with 41,263 between January and June – mirroring the seasonal pattern seen in previous years.
The number of new plans agreed in the second half of the year remained 7% lower than in H2 2018 but was 15% higher than two years previously in H2 2017.