Retirement Advantage’s Equity Release Property Value Tracker reveals a 4.6% quarterly increase in potential wealth available to over 55s
New research from Retirement Advantage reveals that the potential wealth available to over-55s in England, Scotland and Wales through equity release has risen to £378bn in Q1 2016, a 4.6% quarterly increase.
Although the South East and Greater London continue to top the regional list for most housing wealth available, property values are increasing faster in other parts of the country.
Alice Watson, product and communications manager at Retirement Advantage Equity Release, said: “As property wealth among over 55s across the country continues to rise, we are seeing rapid uptake of equity release products. That being said, we still have a long way to go to ensure that people approaching retirement are aware of all their options.
“The ERC’s Spring Report shows that the average equity release customer is now unlocking the equivalent of more than two year’s average salary from their properties without having to sell up.
“Many over 55s now see their property, often their most valuable asset, as an integral part of their retirement income strategy.
“Despite the increasing popularity of equity release, our research shows that less than 1% of the potential wealth available to over 55s across the country is being accessed. We expect to see that figure surging over the coming months, with people now taking an increasingly holistic approach to financial planning for their later years.”
The latest findings, calculated using Retirement Advantage’s Equity Release Property Value Tracker, follow the publication of the Equity Release Council’s (ERC) Spring Report which shows that sector lending grew at its fastest rate in H2 2015 since 2008. Total equity release lending hit an annual high of £1.61bn in 2015, up 16% from 1.38bn in 2014.
The latest Retirement Advantage Property Value Tracker finds that house prices are rising fastest in regions outside of Greater London. East Anglia has seen the highest annual growth in property wealth, up 23.5%, followed by the South East (15.2%) and Greater London (21.6%). Greater London saw the greatest quarterly increase in property value (7.5%), followed closely by Scotland (7.1%) and East Anglia (6.5%).
Watson added: “With UK property values growing apace, equity release is becoming an increasingly attractive option for retirees right across the country, not just in the traditional heartlands of London and the South East.
“This attractiveness is bolstered by innovation within the equity release industry. The product range available to customers is becoming increasingly diverse as the market matures, and the Financial Conduct Authority has taken welcome steps to ensure that greater numbers of retirees can access these products.”
