The coronavirus pandemic has changed how equity release customers are spending their money according to Stuart Wilson (pictured), corporate marketing director at more2life.
Greater economic uncertainty along with growing financial pressure has led to an overall shift towards people using their money to cover everyday costs rather than luxury items.
Wilson said: “Since the government announced its stamp duty holiday, we have seen another emerging trend with more customers using equity release to purchase property.”
He went on to explain that in a normal month, it is expected that 5% of all customers release equity to purchase property.
However, he noted that this figure has risen to 15%.
He added: “Meanwhile, the number of borrowers who are porting their existing lifetime mortgage to a new property has also increased significantly.”
Using equity release when buying a property helps older people to increase their buying power so they can move to a more suitable property in the area they desire.
Wilson said: “It is no surprise that as older homeowners look to take advantage of the stamp duty holiday, we have seen a substantial increase in house purchase cases.
“However, this is a largely underused benefit of equity release and later life advisers should work in collaboration with lenders to learn more about how it can help their clients.”