Equity release values soar
The average equity release customer released an average of £55,272 in the first half of 2013 compared to £49,305 in the first half of 2012.
The Monitor also revealed a 3% jump in the number of sales as 9,540 plans were taken out and a total of £508m of housing wealth was released.
Dean Mirfin, group director at Key Retirement Solutions, said “The sales trend is firmly up with plan sales continuing to expand.
“But the values released continue to grow faster than plan sales reflecting the increase in average amounts released.
“That highlights how customers are confident about making use of their property wealth as part of financial planning which is being driven by market innovation and the quality of advice.”
“Equity release is playing a major role in helping retired homeowners maximise retirement income which is particularly needed when customers need to find the best solutions in the face of low interest rates and low annuity rates.”
The Monitor also revealed how customers are using the money they release from their properties.
Around 21% of customers used some or all of the cash to clear mortgage debts showing increasing awareness of equity release as a solution to the interest-only crisis.
Clearing mortgage debt is now a more popular use of equity release money than paying off credit card and loan debts.
However, home and garden improvements remained the most popular use of funds – 57% of people used some or all of their cash for those purposes followed by 31% using money for holidays and 28% gifting the money to family and friends.
Across the country all 12 regions saw increases in the value released with Scotland seeing a 36% rise followed by Wales on 27% and East Anglia on 25%.
The smallest increase in value released was in London at 0.8% but it recorded a 7.4% rise in the number of plans sold.
But five out of 12 regions saw a fall in the total number of plans sold with the South East recording the biggest drop of 12.6%.
The region however saw a rise in value released of nearly 7%. Northern Ireland suffered a near 10% drop in plans sold while sales fell 4% in the North.