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Equity release hits £1.63 billion as plan sales surge

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Global Administrator

Retired homeowners released £1.63 billion of property wealth in the first six months of the year as the equity release market continued its record-breaking expansion, new data from the UK’s leading independent equity release adviser Key Retirement shows.
 
Around £8.9 million of property wealth was released every day in the six months to July with equity release plan sales growing by 19% on the same period of 2017, Key’s H1 2018 Equity Release Market Monitor shows.
 
Customers are receiving an average of nearly £78,000 to boost their standard of living in retirement with families one of the biggest beneficiaries of their property wealth gains.
 
Around 28% of retired homeowners used some or all of the money for gifts for families compared with 23% in the first six months of 2017.
 
The total value of property wealth released to the end of June increased by 31% on the previous year to £1.63 billion from £1.24 billion and plan sales grew to 20,934 from 17,656.
 
Dean Mirfin, chief product officer at Key Retirement, said: “Customer demand is driving the expansion in the market to new record highs enabling more retired homeowners to transform their finances.
 
“More money was released in the first six months of 2018 than in the whole of 2015 as records continue to be broken across the market with expert independent advisers playing a vital role.
 
“Property wealth is not just helping to transform an individual’s retirement planning but is also helping their families with their financial needs. The growth in gifting underlines how much can be achieved when the average amounts being released are as much as £78,000. The Bank of Mum and Dad, or Gran and Grandad are changing lives, and not just their own.”
 
The most popular use of the money released in the six months was to fund home and garden improvements with 63% of retired homeowners spending some of the money on their houses while 33% used the cash to pay for holidays.
 
Debt remains an issue – around one in five (22%) cleared outstanding mortgages during the six months and 32% paid off credit cards or loans.
 
Key’s Equity Release Market Monitor, which analyses its data reflecting both Equity Release Council members and non-members, shows the South East of England accounted for more than a quarter of all equity release sales and nearly 30% of total lending.
 
Retired homeowners in London released an average £133,000 of property wealth each in the six months – the highest in the country – followed by the South East on nearly £90,000 and the South West on £77,000.
 
But every region saw strong growth in the value of property wealth released. The total value of property wealth released soared by 65% in East Anglia and plan sales surged by 50% in the West Midlands.
 
Other areas recording strong growth in property wealth released included the West Midlands at 62% and the East Midlands on 56% followed by the North East at 55%. Hot spots for rising sales of plans included the East Midlands at 45% followed by Northern Ireland on 43% and Wales on 42%.  
 

Region Number of plans sold H1 2018 Number of plans sold H1 2017 Total value released H1 2018 (£ million) Total value released H1 2017 (£ million)
South East 5,376
 
4,822 £482,708
 
£394.155
London 2,254
 
1,950 £300,071
 
£222.169
South West 2,254
 
2,195 £173,961
 
£158.694
North West 1,796
 
1,440 £103,031
 
£79.260
East Anglia 1,617
 
1,276 £120,800
 
£76.903
East Midlands 1,806
 
1,361 £114,090
 
£76.706
West Midlands 1,624
 
1,183 £104,516
 
£67.653
Yorkshire & Humberside 1,288
 
1,059 £71,661
 
£56.263
Scotland 1,211
 
1,037 £64,971
 
£46.590
Wales 931
 
713 £53,160
 
£38.127
North East 595
 
481 £34,321
 
£23.260
Northern Ireland 182
 
139 £8,148
 
£7.275
UK 20,934 17,656 £1,631 bn £1,246 bn
 
 
Around 57% of all sales were drawdown plans, including 13% in enhanced drawdown which offers enhanced terms to people with health or lifestyle conditions, compared with 43% from lump sum lifetime mortgages including 16% of enhanced products.
 
Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6027 or visiting www.keyretirement.co.uk/equity-release/free-guide/
 
Notes to Editors
* Key Retirement market data for H1 2018 The Monitor uses Key’s data to reflect the market as a whole. The data reflects both members and non-members of the Equity Release Council, and provides the most detailed analysis of the equity release sector
 
 
For more information or to request a case study, please contact:
 
Lee Blackwell
Director of Public Relations and Public Affairs
Key Retirement Group
07384511140
E-mail: [email protected]
 
Rachel Mann
Key Retirement Group
01772 508530
E-mail: [email protected]
 
Citigate Dewe Rogerson
Katie Ormrod
0207 282 1023
E-mail: [email protected]
 
 
About Key Retirement
Founded in 1998 Key Retirement is the leading specialist provider of financial solutions to the over 55’s. Key Retirement’s head office is located at Key Retirement, Baines House, Midgery Court, Pittman Way, Fulwood, Preston PR2 9ZH.