Growing numbers using equity release to buy new property

In the second quarter of this year, 10.3% of customers took out an equity release loan in order to fund a new property purchase. This compares to 6.6% who used equity release for this reason in 2017 – an increase of more than 50%.

Alice Watson, head of product and marketing at Retirement Advantage Equity Release, commented: “We’ve seen plenty of headlines suggesting the property market has slowed in recent months. Not for over-55s, it seems. For this cohort, our figures suggest they are increasingly keen to make property purchases.

“It is unlikely this is down to a wave of downsizing. We know from research we conducted earlier this year downsizing is not popular – only one in five older people say they’re prepared to consider it. Instead, the increase suggests that the attraction of property as a long-term investment endures. For over-55s keen to own new property, wealth tied up in their existing home can make a significant financial contribution.

“Using existing property wealth in this way also offers further evidence that equity release customers today are proactively using the products to make major financial decisions. This reinforces the rapid maturity across this booming sector.”