Equity release lending in the UK broke the £2 billion barrier for the first time in 2016, marking a landmark year for the sector, new figures show.
Overall lending reached £2.15 billion for the year, an increase of 34% on 2015 with an additional £542 million of lending activity amounting to double the rate of growth from 2014 to 2015.
The figures from the Equity Release Council also shows that sector also finished the year on a record quarterly high as lending increased 51% to £670 million year on year across the last three months of 2016, from £445 million in the fourth quarter of 2015.
From October to December 2016 some 8,303 new equity release plans were taken out, an increase of 12% from the previous quarter and up 30% year on year. The final quarter of 2016 also marked the first time since the fourth quarter of 2006 that the number of new plans exceeded 8,000 in any single quarter. Overall new plans across 2016 stood at 27,563, the highest amount since 2008.
Lump sum lifetime mortgages proved popular in 2016, with the number of new plans agreed increasing by 26% year on year. This increase outstripped the rate of growth in drawdown products, which rose 19% by volume over the same period.
Drawdown products remain the most popular: the total number of new drawdown plans was 17,882 for the year, accounting for 65% of the market. However, the appeal of lump sum products saw them record their largest share by volume of new plans agreed since 2010 at 35%. The report says this is likely to be influenced by the use of housing wealth to repay mortgage debt as well as meeting other financial needs.
Equity release may include a lifetime mortgage, to understand the features and risks, ask for a personalised illustration.’ where the promotion also relates to a home reversion plan the statement may be adapted to the extent necessary to comply with the equivalent requirement for home reversion plans.