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One in five equity release plans taken by owners of homes worth more than £550,000

One in five equity release plans taken by owners of homes worth more than £550,000
Samantha Partington
Written By:
Samantha Partington

One in five equity release plans were taken out by owners of properties worth at least £550,000 in the first three months of the year, 22% of whom used the cash for home improvements.

Some 8% of those equity release plans were taken out by those with homes valued between £550,000 and £699,000.

The analysis, which was by lender Pure Retirement of its new Q1 plans, also revealed that the most popular reason to release equity among this group of borrowers was to carry out home improvements.

Just less than 20% said their primary goal was to use equity release to repay debts and mortgages, while 15% said they were releasing funds for holidays. Some 11% used housing equity to buy cars.

Paul Carter, chief executive, said: “Equity release has become an increasingly mainstream tool that suits a wide variety of circumstances and needs, irrespective of whether that’s aspirational or needs-based borrowing, or where the borrower is in the housing value spectrum. It confirms the need for flexible products that can cater for a diverse audience.”

Equity release brokers say there has been a boost in consumer demand at the start of this year, following a weak 2023.

According to broker Key’s Market Monitor, the number of equity release plans sold in 2023 fell by 45% annually to 28,752. The value of new lending for both lump sum and drawdown plans declined by 62% to £2.1bn. Key said it expected lower rates and product development to encourage growth in 2024.

Related: Equity release market has ‘reasons to be cheerful’