Equity release market sees over £1bn of business in Q1 as market grows 14% year-on-year

Ryan Fowler

April 30, 2020


Some £1.06bn of property wealth was accessed via equity release plans in the first quarter (Q1) of 2020, up 14% on the same period in 2019, according to the latest figures from the Equity Release Council.

The total number of customers was up 7% year-on-year to 21,884 but down 1% on Q4 2019

There was a modest increase in the number of new plans agreed in Q1 2020, up by 2% over the last year to 11,079, though down by 7% from 11,866 from Q4 2019 in line with seasonal patterns.

Alice Watson, head of marketing, insurance, Canada Life, said:  “It’s great to see that the equity release market grew 14% year-on-year; the industry was in a strong position at the start of what is going to be an unusual year.

“The majority of valuation partners withdrew onsite valuation services towards the end of March, so while Q1 was largely unaffected by the coronavirus pandemic, we will start to see the impact throughout Q2 and Q3.

“Equity release is – and will continue to be – an important consideration for those looking at holistic retirement solutions, and while the current situation may delay some cases, we’re still processing new applications every day.

“It’s great to see that the equity release industry has pulled together to deliver solutions for advisers and their clients during this period, and I’m confident that as we are eased out of lockdown and valuers get back on the road, the industry will revert to growth.”

Dave Harris, chief executive officer at  more2life added: “Today’s figures reveal the equity release market started 2020 with signs of strong growth.

“The number of older homeowners using equity release was up 7% on the same period in 2019, and over £1bn of property wealth was unlocked by over-55s during the quarter.

“However, as we start to move through Q2, the landscape has become drastically different. The Coronavirus pandemic has seen the average equity release customer self-isolating and the industry considering how it can maintain safeguards while still supporting those who need equity release.

“Continued collaboration amongst funders, lenders and trade bodies to ensure that the solutions customers need during these uncertain and challenging times are available is needed.

“It will also be crucial for the wider industry to help equip advisers with more tools, support and ‘know how’ to ensure that they can continue offering the highest-quality service to these customers.

“There is no doubt in my mind that equity release will play a vital role in supporting many people finances now and in the future but this can only happen if we learn from the challenges we are facing now.”

Will Hale, CEO at Key, said the figures show the potential in the sector.

He said: “Today’s Equity Release Council Q1 2020 figures highlight the extent of customer demand and the potential for growth as, after an uncertain 2019, confidence had started to return to the market before the onset of the coronavirus crisis.

“Despite the current uncertainty, the total number of customers served has remained steady and there was even a modest year-on-year increase in the number of new plans agreed in the first three months of the year.

“This clearly demonstrates that the equity release market is meeting a growing need for later life lending with £1.06bn of property wealth released in the quarter.

“While the ‘new normal’ will undoubtedly have an impact on the market, we have seen the entire industry step-up to help customers with developments such as semi-automated valuations, telephone-based advice and a more flexible approach to providing independent legal advice.

“At Key, we are also adapting our advice philosophy to ensure it reflects the current challenges customers are facing and the product landscape at this time.

“Releasing money from your home is an important long-term decision and it is vital that all the risks and benefits are properly considered during a period when customers may be feeling more worried than ever about their future and that of their wider family.

“Good specialist advice is crucial and that may mean recommending customers do not proceed at this time. We believe that helping customers to make choices that will stand them in good stead for the long term – especially when there is so much uncertainty at the moment – is the only correct approach.”

Sign up to our daily email