Mortgages.scot

The Equity Release Council (ERC) has published its Q1 2024 figures, and they are pretty steady overall. They show that people are continuing to release equity from their properties. The figures published include both new and returning customers from January to March.

The figures in brief

The numbers are pretty decent, although they still show that equity release customers are just as cautious about interest rates, even if they won't have to repay until after they're gone.

Overall, there were 14,216 equity release agreements in the Quarter

An increase of 4% compared to Q3 2023, which saw 13,651 new agreements

Around 56% of all new customers chose drawdown lifetime mortgages, which is the highest share since 2021

Total lending in the quarter was £504m, down slightly compared to Q4 2023, which was £535m

A return to solid growth in the sector is expected as we progress in 2024, especially with signs of reducing interest rates

There is a fairly strong feeling of confidence in the equity release market amongst customers. This is great as it's a product that has been made and, in fact, still does make some nervous that older borrowers are being led into agreements they don't fully understand. I believe the ERC does a good job of ensuring providers meet good guiding principles and act with integrity.

A trend towards drawdown plans has emerged; this allows borrowers to tailor their needs in a way that is both sensible and meets their needs. This plan allows the borrower to agree on how much equity they can release initially but only draw when required. That way, interest is paid only on the funds drawn instead of all at once.

The following chart shows the number and type of customer borrowing.

Then, we can see the average new loan size being taken.

Finally, we can have a breakdown of the new drawdown mortgages that shows how much customers have drawn vs what they have left in reserve and can borrow in the future. We can see that the average drawn is about 65%. This is expected. Customers tend to make a bigger initial drawdown to manage immediate needs which could be for a variety of reasons then draw as required after that.

Find out more

Since 1991, about £46bn has been released from property through equity release. If you are interested in equity release, please always consult with a suitably qualified professional. You can visit the Equity Release Council here to find out and more and find an advisor in your area.