The equity release adviser has released data suggesting that H1 2020 saw £455million worth of equity released from homes, compared with £372million in the same period in 2009.
The average age of individuals releasing equity has risen, said KRS, from 67 in H1 2009 to 69 this year, which the adviser says is a result of the continuing squeeze on pension income.
The number of plans rose by 5% to an estimated 10,318 from 9,852 over the same period, and drawdown plans, which allow people to release cash as they need it rather than in a lump sum, rose as a proportion of the total equity release sales from 61% to 72%.
The average value of equity released remained stable at £42,555 this year, a negligible change from last year’s £42,586. The average loan to value of equity release plans fell to 19% from 22% reflecting the shift to increased use of drawdown plans. And single advance lifetime mortgages made up 25% of sales in 2010 compared with 35% in 2009 while reversions slipped from 4% of total sales last year to 3% in the first six months of 2010.
Dean Mirfin, group director at Key Retirement Solutions, said: “Housing wealth is an important source of income for pensioners and certain to become even more important as pension income continues to be squeezed. New business growth rates of 22% on 2009 demonstrate that customers are recognising that their housing wealth can be put to good use.”
Growth in the market has prompted the return of equity release provider More2Life with a lifetime mortgage specifically for those with impaired health. There have also been rumblings of another provider entering the market headed up by former KRS key partnerships director Terry Pritchard.
Mirfin added: “The strong sales performance is underlined by the fact that the number of firms competing in the market looks to be turning the corner in a positive direction after recent withdrawals and that new plans offering improved terms to people with medical conditions are demonstrating that there is good space in the sector for further innovation.”
