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Thursday 21st February 2008
Taking out a plan - Equity release becomes more popular
There has been significant growth within the equity release market, clearly indicating that getting extra cash by utilising the value of your home through equity release is gaining popularity. A comparison between the number of plans taken out in 2006 and 2007 shows an increase of almost 9% with 27,700 plans in 2006 and 30,088 in 2007.
The South East area accounted for 21.3% of the plans taken out in 2007. This is followed by the North West, where 4,056 plans were taken out, although strangely the North West did in fact experience a decrease of 13.2% when compared to 2006. The figures for the other regions, except for a minor decrease in the West Midlands, also support the upwards trend. More than half of all regions sold over 2,000 plans each. Scotland and Northern Ireland, which currently lag behind most other regions, still showed an extremely strong increase with increases of over 100% in comparison to 2006.
Dean Mirfin, industry expert, comments: “It is encouraging to see that the equity release market continues to expand. With increasingly flexible and competitively priced products, equity release is proving attractive to more and more homeowners. Whilst 2008 comes with the challenge of a slowing housing market, we believe the equity release market will remain resilient.”
Another interesting development is that the customers taking out an equity release plan are getting younger as well. Whereas the average age of an equity release customer was 69.6, 2007 showed this falling to 68.4. In Northern Ireland the average age was even lower, at 66. It seems that many people are starting earlier to prepare for their security and enjoyment in retirement. This could partly be down to uncertainty over pensions and concerns over inflation and rising costs of living or similar. With plans now starting from age 55 and equity release presenting itself as a realistic and safe way to maintain or enhance your lifestyle in your later years, this trend seems likely to continue.