- Average amount released climbs to £52,000 as plan sales and values soar, KRS Equity Release Market Monitor shows
- Eight out of 12 regions see growth in plans and value
Download the full report at: http://www.keyrs.co.uk/media/MARKET-REPORT-ANNUAL-2012.pdf
Equity release market expansion continued for the second year with a rise in the average amount released last year boosted by increased sales of plans, analysis from leading independent equity release adviser Key Retirement Solutions shows.
The average customer taking out an equity release plan in 2012 released £52,268 – nearly 7% up on 2011’s £49,000 – as the continuing squeeze on retirement income highlighted the benefits of property wealth, the group’s Equity Release Market Monitor 2012 shows.
Total funds released across the market climbed 15% to £961.41 million from £832 million taking the market nearly back to its 2009 level when more than £1 billion was lent. However once untapped drawdown funds of £415.6 million – which have yet to be released – are added in the total released was nearer £1.4 billion.
Plan sales climbed 6.3% during the year to 19,675 from 18,510 with drawdown plans enabling customers to benefit from lower borrowing costs as they can take funds when required rather than in a lump sum
Around 74% of all sales were drawdown confirming the focus on innovation across the market compared with 25% from lifetime mortgages and just 1% from reversion plans.
Home and garden improvements remained the most popular use of funds – 57% of people used some or all of their cash for those purposes.
Dean Mirfin, Group Director at Key Retirement Solutions (www.keyrs.co.uk), said “Equity release is firmly established on the growth path driven by innovation and a focus on expert advice.
“The increase in the average amount being released is significant as it demonstrates increasing confidence in the market as a solution to the continuing squeeze on pensioner income from low savings rates and falling annuity rates.
“Innovation in the market is continuing with the launch of plans designed to help clients tackle the issue of funding interest-only mortgages into retirement. Plans are now available enabling clients to pay interest and release funds which is a direct response to the interest-only ticking time bomb problem.”
The Market Monitor shows 18% of customers are using some or all of the cash released to pay off mortgages while 22% are using the money to clear credit card debts or loans.
The ongoing squeeze on pensioner income and the ticking time bomb of interest-only mortgages are making the case for equity release.
Across the country 8 out of 12 regions saw growth in the total number of plans sold with Northern Ireland seeing growth of 31% and Scotland recording a rise of 19%. The West Midlands saw a fall of 7% but other regions recorded marginal drops.
Region |
Total plans sold 2012 |
Total plans sold 2011 |
Total value released 2012 (£million) |
Total value released 2011 (£million) |
|
South East |
4,580 |
4,073 |
£253.196 |
£203.94 |
|
London |
1,719 |
1,586 |
£148.84 |
£114.63 |
|
South West |
2,467 |
2,307 |
£126.06 |
£114.16 |
|
North West |
2,063 |
2,080 |
£86.86 |
£83.62 |
|
East Anglia |
1,039 |
1,027 |
£41.27 |
£40.85 |
|
East Midlands |
1,715 |
1,467 |
£62.769 |
£50.79 |
|
West Midlands |
1,547 |
1,655 |
£65.617 |
£64.88 |
|
Scotland |
1,161 |
973 |
£46.476 |
£33.499 |
|
Yorks & H’side |
1,581 |
1,628 |
£60.43 |
£60.367 |
|
Wales |
890 |
946 |
£36.29 |
£37.05 |
|
North |
787 |
670 |
£29.08 |
£25.2 |
|
Northern Ireland |
126 |
96 |
£4.5 |
£3.429 |
|
UK |
19,675 |
18,510 |
£961.41 |
£832.496 |
Anyone looking to release equity from their home can get Key Retirement Solutions’ independent guide to equity release by calling 0800 531 6010 or visiting https://www.keyrs.co.uk/free-guide.
Notes to Editors
* Key Retirement Solutions market data
For more information, please contact:
Dean Mirfin, Group Director
Key Retirement Solutions
07879 678737
Press Office
Key Retirement Solutions
01772 508533
Citigate Dewe Rogerson
Kevan Reilly/Paul Griffin
0207 282 1096/1041
About Key Retirement Solutions
Founded in 1998 Key Retirement Solutions is the leading independent adviser specialising in equity release. Key Retirement Solutions is a limited company registered in England No 2457440 with its Head Office at Key Retirement Solutions, Baines House, Midgery Court, Pittman Way, Fulwood, Preston, Lancashire, PR2 9ZH. Key Retirement Solutions is authorised and regulated by the Financial Services Authority.
