The average equity release withdrawal now tops £66,500 – a 4% increase from the fourth quarter of 2014.
Nigel Waterson, chairman of the Equity Release Council said: “These figures show that the appetite for equity release continues to grow despite the potential uncertainty to peoples’ financial planning decisions caused by the recent pension access reforms.
“These have brought the topic of financial planning for retirement firmly to the fore and we hope this encourages people to seek financial advice to discuss the many options available to them, of which equity release is one.”
Many within the equity release sector do expect the pensions freedoms, which came into effect on April 6, to gradually boost the equity release sector in 2015. As part of the reforms older people can access government ‘guidance’ on how to manage their finances.
Andrea Rozario, Bower Retirement’s chief corporate officer, said: “We're not going to see an overnight surge in equity release because of pension freedoms, but what will happen is an increasing number of people turning to advice – and an acceptance that property wealth is part of the retirement planning.
“For a number of people that will mean utilising equity release.”
And Simon Chalk, technical manager – equity release at Age Partnership, said: “People may get giddy and burn their pensions sooner and then they will turn to equity release sooner.”
In more detail the Equity Release Council figures show that drawdown products, where money can be drawn in stages, were most popular in the first quarter – accounting for 59% of lending at £192m.
Lump sum mortgages meanwhile, where the customer takes a single payment secured against the property, accounted for 41% of lending – at £133.2m.
Waterson added: ““We believe that understanding of equity release has improved significantly over the last year and that equity release is now firmly established as a mainstream form of borrowing.
“This is especially true as older borrowers are increasingly turned away by normal mortgage lenders.
“I predict increased consumer demand and product innovation from providers over the coming year.”
