This is a significant increase from the £6.44 billion figure seen in the three months to the end of March. Experts believe the rise is unsurprising given the number of factors currently influencing the market. However, Simon Kent, head of retail banking at Troika, said further growth depends on providers fuelling demand and improving the image of equity release products.
Kent explained: “Lenders are getting much better at equity release actuarially speaking – there is better information and better experience of delivering these types of products. In simple terms, as we lend more we learn more which in turn enables us to lend more.”
He added: “There’s a changing attitude among consumers. It’s now more acceptable to spend a child’s inheritance than in previous generations and there’s greater confidence in providers and the quality of products, as blue-chip financial services firms start launching equity release. We also see much more brand presence in the market from major providers.”
“Given the range of other financial drivers, such as the pensions crisis, retiring individuals need to access their largest asset much more than they have done in previous generations. However, we can expect the equity release market to slow down again as house prices continue to stagnate,” he concluded.
But Dean Mirfin, business development manager at Key Retirement Solutions, said there are still those who have not yet taken advantage of the rise in the value of their home. “As prices level off, those people are still out there and will take advantage,” he said. “Continued increase depends on property prices.”
