There has been a striking rise in the number of people using equity release to buy a new property, according to new figures from Retirement Advantage.
The retirement income and equity release specialists said the findings demonstrate a growing willingness among over-55s to use property wealth in a diverse range of lifestyle areas. Other popular uses for equity release, the data revealed, are other one-off purchases such as cars and holidays.
Some 10.3% of the company’s customers took out an equity release loan in order to pay for a new property purchase in the second quarter of this year. This is up by more than 50% on last year, when only 6.6% used equity release to acquire a property.
“We’ve seen plenty of headlines suggesting the property market has slowed in recent months,” Alice Watson, head of product and marketing at Retirement Advantage Equity Release, said.
“Not for over-55s, it seems. For this cohort, our figures suggest they are increasingly keen to make property purchases.”
She said that 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,” Watson explained.
Instead, she said, the rise 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,” Watson continued.
“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.”