What you need to know
Equity release sales have continued on an upward trend, with figures from the Equity Release Council showing 7% year-on-year growth in volume and 17% growth in value in 2015. During the year, the market was boosted by the entry of a major new provider, Legal & General, which will help to extend the reach of the product.
Mintel forecasts that new sales in the equity release market are expected to grow by £1.2 billion to 2020. This growing market is expected to attract an increasing number of providers and advisers. The rapid growth of the population that are eligible to take out a plan will support growth in customers, as will changing attitudes towards retirement and the growing numbers that are taking debt into retirement.
This Report considers the factors and trends that are helping to drive demand for equity release. The Report draws on industry research to evaluate recent sales performance, as well as the results of an independently commissioned consumer survey. Mintel’s survey examines the consideration of equity release products among the retired population, as well as those approaching retirement. It also looks at attitudes towards the product, expected financial positions in retirement, as well as the growing issue of debt in retirement.
Definitions and Report scope
For the purposes of this Report, Mintel has used the following definitions:
Equity release is a way of accessing the wealth tied up in a property without the need to move. With equity release, homeowners can either borrow against the value of their home (a lifetime mortgage) or sell all or part of it (using a home reversion plan) in return for a regular monthly income, a lump sum, or the facility to get at equity as and when they like (drawdown) or a combination of these options.
To be eligible for equity release, homeowners must meet the following criteria:
Be aged 55 or over (or 60+ for home reversion plans); for joint plans the youngest borrower must be at least 55
Own their property outright, or in some instances, have a very small outstanding mortgage
The property must be in England, Scotland or Wales
Equity Release Council
The Equity Release Council was established in 1991 and is the industry body for the equity release sector. The Equity Release Council represents the providers, qualified financial advisers and other intermediaries, lawyers and surveyors who work in the equity release sector. Although membership is voluntary, equity release providers are who are members agree to follow Code of Conduct rules. The ERC represents over 90% of all lifetime lending activity.
