The Equity Release Council stated that drawdown accounts for 7 in 10 new plans agreed as equity release lending breaks quarterly, half-year and annual records[i].
Homeowners over the age of 55 unlocked a record amount of housing wealth via drawdown lifetime mortgages in the final few months of 2015, driving annual equity release lending to a new high of £1.61 billion according to year-end results from the Equity Release Council.
Lending via drawdown products totalled £271 million between October & December 2015, the largest quarterly total since this type of lifetime mortgage was first established in 2004.
70% of new plans agreed in quarter 4 of 2015 were drawdown, as more customers opted to withdraw their housing wealth in multiple stages to boost their retirement income as and when they need it.
These were welcome results to the Equity Release Council, who are celebrating the 25th anniversary of the first industry Standards being developed for Equity Release this year.
Nigel Waterson, Chairman of the Equity Release Council, commented:
“These year-end figures are the latest sign of growing reliance on housing wealth as a key pillar of later-life financial planning. The rising popularity of drawdown has been one of the success stories of the last decade, and product features have since appeared allowing customers to protect a percentage of their equity as an inheritance, make part-repayments of capital or make interest repayments on their loan.
“Housing wealth is often people’s greatest asset and it makes sense for equity release to be on every homeowner’s checklist to consider as part of their retirement and estate planning. At the same time, it is not suitable for every circumstance, which is why professional financial advice and independent legal advice are essential so that customers understand how the products work, and what they can offer.”