Retired homeowners cashed in more than £934m of property wealth in the first six months of the year, as a buoyant housing market continued to boost retirement incomes, according to Key Retirement.
This equated to £76,300 each – an increase of £7,850 on the same period last year – however, the provider’s findings revealed wide regional variances, ranging from an average release of £67,000 in East Anglia to more than £184,000 in London.
Key Retirement’s analysis of data representing Equity Release Council members and non-members, showed total property wealth released in the last six months rose 24 per cent to £934m from £753m, while the total number of plans increased 11 per cent to 12,246 from 11,007.
Increasing house prices meant the average property value of homeowners using equity release plans was up 16 per cent to £307,021 from £271,248 over the first half of 2016.
Digging into the data, Key Retirement found 61 per cent of all sales were drawdown plans, including enhanced drawdown - which offers enhanced terms to people with certain health or lifestyle conditions - compared with 39 per cent from lump sum single advance lifetime mortgages, including enhanced products.
Across the country, eight out of 12 regions saw growth in the value of property wealth released, with East Anglia recording an 80 per cent rise, Wales with 57 per cent and the south east recording a 33 per cent increase.
Region | Number of plans sold H1 2016 | Number of plans sold H1 2015 | Total value released H1 2016 (£ million) | Total value released H1 2015 (£ million) |
South East | 3,082 | 2,627 | £283,614,875 | £212,743,258 |
London | 1,380 | 1,211 | £184,209,345 | £152,021,282 |
South West | 1,443 | 1,302 | £105,008,836 | £85,125,883 |
North West | 1,134 | 957 | £58,958,019 | £45,171,630 |
East Anglia | 905 | 649 | £67,181,404 | £37,260,422 |
East Midlands | 977 | 800 | £53,854,229 | £40,599,629 |
West Midlands | 846 | 776 | £47,277,288 | £43,937,381 |
Scotland | 715 | 843 | £38,930,928 | £42,077,174 |
Yorkshire & Humberside | 787 | 894 | £40,459,701 | £45,238,909 |
Wales | 554 | 398 | £31,700,717 | £20,085,543 |
North East | 344 | 438 | £19,014,064 | £23,365,779 |
Northern Ireland | 79 | 110 | £4,169,000 | £5,830,127 |
UK | 12,246 | 11,007 | £934,378,406 | £753,457,017 |
Dean Mirfin, technical director at Key Retirement, said the equity release market is hotting up, with more mainstream lenders entering the market and more asset-rich homeowners looking to unlock the wealth from their homes, in the face of declining annuity rates and continued low interest rates.
“Pensioners who are now considering their home as part of their retirement portfolio are benefitting by £76,300 each, this by far outstrips the size of the average pension pot and provides an important income boost for pensioners who need to secure more funds for their retirement,” he added.
peter.walker@ft.com
