It would seem that according to the latest figures by Key Retirement Solutions, equity release has turned the corner and is back on track in the UK marketplace. The latest report suggests that equity release sales have increased by as much as 22% in one year across the UK.
In the first half of 2010, KRS reported that Equity Release sales were in the region of £455 million compared to £373 million over the same period a year ago. This is an extremely positive sign for the industry that saw many players pulling out due to the woes in the property market. The average cash released across the country stayed relatively static at around £42,000 per transaction.
However, there are significant regional variations in the size of transactions across Britain with some winners and losers. In five regions across the country (South East, London, South West, West Midlands and Wales) the average amount of equity released actually fell in the first half of 2010 compared to the same period a year ago. While other regions such as Scotland and Yorkshire/Humberside saw significant increases in the average amount of equity released. They also reported that there has been a surge in the number of people opting for drawdown plans which were up about 5% from the first half of 2010 and the same period last year. Drawdown plans allow customers the ability to release cash as and when needed rather than a lump sum.
Interestingly, they reported that the average age of individuals taking up Equity Release rose to 69 during the first half of 2010 compared to 67 over the same period in 2009. One rationale for this movement is the fact that more elderly people are using Equity Release as a method to substitute their income in order to maintain their lifestyle or pay off debts.