The Equity Release Council reports notable growth for two consecutive quarters.
- In Q3 2024, the market witnessed a 6% increase in funds withdrawn by homeowners over 55.
- New plans rose by 2%, marking recovery since the Autumn 2022 mini-Budget.
- Average loan sizes saw incremental increases in Q3 2024 as confidence returned.
- Flexibility in repayment options is increasingly appealing to new customers.
The Equity Release Council’s recent data highlights a significant development in the market, with a growth streak spanning two consecutive quarters for the first time in two years. Homeowners aged over 55 extracted £615 million from their property wealth between July and September, reflecting a 6% uptick from the previous quarter. This positive trend underscores a renewed interest and participation in equity release schemes among this demographic, buoyed by favourable market conditions and product offerings over the past months.
The number of new equity release plans agreed upon rose by 2% to 5,370, showcasing a promising resurgence in market activity reminiscent of pre-Autumn 2022 levels. This increment indicates that, while modest, there is a gradual reinstatement of consumer confidence within the market, as potential beneficiaries increasingly consider equity release as a viable financial strategy under the current economic climate.
Average loan sizes also experienced a moderate rise, with customers opting for lump sum lifetime mortgages securing £111,618, whereas those choosing drawdown lifetime mortgages took an initial amount of £69,952, reserving an additional £49,747 for future use. This subtle increase suggests consumers are becoming more strategic and cautious in their borrowing, leveraging their home equity with heightened financial prudence amidst ongoing economic uncertainties.
Furthermore, there was an 8% quarterly rise in existing customers seeking further advances, a development supported by the steady increase in house prices over the past six months. This indicates not only a growing need for additional financial resources among existing participants but also reflects a tactical response to the evolving property market dynamics, which continue to influence consumers’ financial decisions.
David Burrowes, chair of the Equity Release Council, expressed optimism regarding these outcomes, noting, “Returning growth may have been modest to date, but it’s particularly encouraging to see the trend continue during the transition period sandwiched between the arrival of a new Government in early July and its first Budget statement later this month.” This statement, highlighting both cautious optimism and a realistic assessment of the market’s trajectory, emphasises the importance of appropriate timing and strategic decision-making in the equity release sector.
As market conditions remain favourable and consumer confidence grows, the equity release sector is likely to see sustained progress.
