More middle class homeowners turning to equity release

Equity release is increasingly being explored by the middle classes when looking at the proportion of cases by house value, according to new research from Pure Retirement.

The lender saw upticks in activity in applications from owners of properties from between £250,000 and £399,999 (36% in 2023, up from 35% in 2022), and properties between £400,000 and £549,999 (19% last year, up from 17% in 2022).

Upper property values, meanwhile, have stayed static, with the proportion of owners of properties valued at £550,000-£699,999 remaining unchanged on an annual basis at 8%.

The data also points to the middle classes being firmly comfortable in using the equity in their homes to support family members through gifting, with 12% of equity released among owners of properties valued between £400,000 and £700,000 in 2023 going towards providing a living inheritance – second only to home improvements.

In contrast, the proportion of applicants who owned homes of under £100,000 more than halved between 2022 and 2023, from 1% to 0.4%, while the proportion of those applying who owned properties valued at between £100,000 and £249,999 also fell 2% year on year, from 28% in 2022 to 26% in 2023.

Pure’s CEO, Paul Carter, said: “These latest figures demonstrate unequivocally that lifetime mortgages are anything but a product of last resort for those from lower socioeconomic groups, and have instead evolved to become an effective financial planning tool for over-55s from all walks of life.

"The shifts in house values among applicants point to equity release increasingly being used by the middle classes, with one in 25 cases also coming from owners of £1m properties, underlying the broad audience modern and sophisticated equity release products now appeal to thanks to ongoing product development.”