Equity release lending reached £1.71bn in 2015 – an increase of 24% from the year before, Key Retirement’s Market Monitor has revealed.
The greatest increases were found in the South East (42%), Scotland (40%) and the North West (25%).
Dean Mirfin, technical director at Key Retirement, said: “2015 was an absolutely massive year from an equity release perspective.
“Sales of equity release plans are rising strongly as well underlining how pension freedoms have widened the choice of retirement income solutions with people now considering their home as part of their retirement portfolio.
“Property wealth is making a massive contribution to retirement income and planning with pensioners releasing a record £4.7m a day from their homes.”
Key Retirement is predicting a further 25-30% uplift in equity release lending in 2016 with around £2.2bn of lending.
In 2016 an estimated 40,000 interest-only customers will see their loans mature, and Mirfin reckons half of these will have no repayment strategy.
He said around 40% of people on interest-only terms can use equity release to pay up the loan, with the equity they have in the property being the greatest stumbling block.
Mirfin added: “The interest only mortgage problem steps up a considerable gear in 2016 and the market needs further innovation to meet this increased demand from those who urgently need solutions to enable them to remain in their homes.”
TOTAL VALUE OF EQUITY RELEASED ACROSS THE COUNTRY