Total equity released in the first nine months of 2021 at £2.989bn is just short of the £3.4bn released in both 2020 and 2019
Customers took out £1.049bn in property wealth in the three months to the end of September, according to data from equity release adviser Key.
The total value of equity released increased by 18.8% from nearly £884m in the third quarter of 2020. However the number of equity release plans taken out decreased by 3.2% year-on-year (YOY) to 10,333 (compared with 10,671 in Q3 2020) remained below pre-pandemic levels when 11,772 equity release plans were taken out in Q3 2019.
Total equity released in the first nine months of 2021 at £2.989bn is just short of the £3.4bn released in both 2020 and 2019 putting the market on course for a record £4bn.
Around 75% of customers took out drawdown plans in the three months with the average initial advance standing at £57,183 with customers still having the ability to draw a further £301.5m.
Customers on average released £101,593 in the three months, around 23% higher than the £82,827 in third quarter of 2020.
Nearly three quarters of the money released (73%) was used for debt management and to helping family and friends in the three months to end of September.
Around £588m of the money released in the quarter was used to clear debts while more than two-fifths (42%) of the cash given to family and friends was used for house deposits while 36% was given as an early inheritance.
Key estimates that by the end of September the market transacted 3,000 remortgage cases with customers on average moving borrowing of £134,597 from a rate of 5.1% to 3.6%.
Will Hale, chief executive at Key, said: Against the backdrop of a pandemic, the equity release market is on track to break the £4 billion barrier and potentially even touch £4.5bn by the end of the year.
This performance demonstrates how modern equity release products are now embedded within the mainstream financial services market, offering low rates and flexible features to address a wide range of different customer needs and wants, he said.
He said: This year we’ve seen increasing numbers of people using equity release to support families, manage their current borrowing and use the historically low rates to remortgage their existing equity release plans.