Equity release is becoming increasingly important for home owners and their retirement finances as new figures show many use it for everyday money matters.
Retired home owners in the UK are using their housing wealth to clear debts to strengthen their finances, new equity release market figures relating to the first quarter of 2019 suggest.
It may actually make more financial sense for older people to rent rather than withdraw equity from their properties, according to Girlings Retirement Rentals.
The equity release market in the UK has recorded its busiest start to any year on record in 2019, according to the latest quarterly market figures.
The Equity Release Council has announced a range of initiatives at its Annual General Meeting to help firms deliver a high standard of support for home owners looking at equity release and later life financial planning.
The importance of unlocking housing wealth to meet consumer needs in later life and continuing product innovation are ensuring equity release occupies an increasingly central role in the UK, a new report shows.
Some £136 of housing wealth was unlocked every second between October and December in the UK, as the equity release market continued its strong growth, new figures show.
Retired home owners released £3.6 billion in new property wealth in the UK last year as the market doubled in size in just three years, new data shows.
More home owners seeking advice about property wealth and what they can do to access it means that membership of the Equity Release Council has passed 300 for the first time.
UK Asset Resolution (UKAR), the holding company for Bradford & Bingley and Northern Rock, has sold a portfolio of equity release loans to Rothesay Life for £860m.
Lifetime mortgages could get scarcer and more expensive as the Bank of England fears lenders are under-pricing the risk of a fall in house prices.
With the value of cash being released from homes passing £3bn a year for the first time, equity release has cemented its place in the mainstream of financial planning.
A negative equity time-bomb is growing under Britain's banks and insurers as baby boomers are unlocking unprecedented sums of cash from their homes in equity release schemes at ever-younger ages.
Equity release is booming, with older people withdrawing almost £8m a day from their homes, it emerged this week. And there are more schemes than ever available to over-55s looking to unlock the value tied up in their property so they can, for example, pay off their interest-only mortgage.
More people are taking out so-called drawdown pensions without taking advice, the City regulator has warned.
Some £8.2 million of housing wealth was withdrawn in the UK every working day in the second quarter of 2016 as equity release lending passed £0.5 billion for the first quarter on record.
Overall there was £514.4 million of lending in quarter two, up 34% year on year and 58% higher than in the second quarter of 2014, according to the latest figures from the Equity Release Council.
The council report points out that the three busiest quarters for equity release lending have all come within the last 12 months and the annual rise in the number of new plans agreed is the fastest seen in 13 years.
The potential wealth available to over 55s in England, Scotland and Wales through equity release increased to £381 billion in the second quarter of 2016, a 0.7% quarterly increase, the latest research shows.
However, values failed to increase across Greater London for the first time in almost four years due to uncertainty surrounding the European Union referendum while equity release potential elsewhere in the country continues to grow apace, according to the Equity Release Property Value Tracker report from Retirement Advantage.
The report says that house prices are rising fastest in regions outside of Greater London, with the capital suffering its first quarterly drop in property values since the fourth quarter of 2012.
Downsizing your home to give yourself an income in retirement is unrealistic, according to the former pensions minister, Steve Webb.
As many as three million people who are planning to rely on their homes for a pension are in for a shock, he said.
In a report for the insurance company Royal London, he said most people doing so would experience a slump in living standards on retirement.
He said the idea amounted to a "downsizing delusion".
Looming interest only mortgage due dates have driven a surge in sales of lump sum equity release plans to 40% of the market in the UK in the first quarter of 2016, according to a market monitor report.
Some 40% of people are taking a single lump sum advance to reduce their debts, up from 30% for the same period in 2015, the data from the report from Key Retirement shows.
The firm believes that the surge is largely being driven by customers who need the maximum cash available rather than drawdown as they are using the lump sum to pay off shortfalls in interest only mortgages. Average amounts released through equity release are now £76,000 and as high as £134,000 in London.
Maturing interest-only mortgages are triggering a surge in the sales of equity release plans, figures reveal
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