The latest data from the Key Retirement’s Q3 Equity Release Market Monitor shows that sales of equity release plans have increased in the three months to October 1st – an increase of 18% to £749m of released property wealth compared the same period last year.
Reporting on the figures, BestAdvice said that sales soared by 26% to 10,477 in the last quarter and that:
- the average retired homeowner released £71,500 of wealth from a property worth £325,000;
- in the capital, pensioners made an average £133,000 from property worth £655,000 ;
- in the South East of England the average house price was more than £400,000 with pensioners releasing more than £84,000.
Every region of the UK has seen sales of equity release plans increasing, with Wales seeing growth of 51% year-on-year and East Anglia an increase of 46%.
Scotland was the only area that saw a fall in the value released. Plan sales, however, still increased, reflecting a drop in the average amount released.
Commenting on the data, Stephen Bradley from property insurance specialists UKinsuranceNET said: “The data shows that 22% of customers used property wealth to pay off outstanding mortgage debt, while 30% used the cash to clear debts and 36% used it to go on holiday. The interesting bit is that nearly a quarter of people used equity release to clear what can only be an interest only mortgage.
“This supports our analysis of previous data where we noticed several of our customers using equity release to pay off some or all of their original mortgage debt”.