It’s positive news for the equity release market after a significant fall in activity during the first lockdown last spring. A total of £963m was released by new and returning customers in Q3 2020 – a 38% increase on Q2. Even so, activity remained 3% down on Q3 2019, according to data from the Equity Release Council (ERC).
September was the busiest month for new equity release plans during Q3; across the quarter, the number of plans rose by 41% on Q2’s levels to reach 10,351. This was likely helped along by an extended pipeline, with some plans due to have been completed earlier in the year only coming to fruition in Q3. Despite this encouraging figure, Q3 2020 was still the second quietest quarter for new equity release customers since Q1 2018, while new plans were down 9% year-on-year.
This pattern was found to extend to returning customers, with 19% more customers (6,697) returning to take extra drawdowns from their agreed reserves than in Q2. However, numbers remained 30% down on Q3 2019’s total of 9,605.
What can we expect?
According to ERC Chairman David Burrowes, the market has adjusted well to operating during a pandemic. Looking to the future, he says, the key market drivers remain in place, “People are living longer and retirement finances are increasingly squeezed as generous final salary pensions edge further to extinction. Many older households are already facing a situation where their expenses outweigh their disposable income, which makes access to property wealth an important pillar to support later life living standards.”
Help is at hand
If you’re considering equity release, it’s important to think it over carefully as it’s not the right option for everyone. If you’re unsure, help is at hand. Just get in touch to chat about the various options available.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.