Retired homeowners have been withdrawing over £6.8 million of property wealth a day, according to new analysis from Keyretirement.com.
Its Q3 Equity Release Market Monitor shows that total sales for the first nine months of the year are already at 92% of the total achieved in the whole of 2015, which was itself an all-time high.
More than £1.58 billion of property wealth has been released in the nine months to October compared with £1.71 billion in the whole of 2015 with the past three months recording strong growth.
The number of homeowners using property wealth to enhance retirement living increased 33% in the three months to 30 September compared with the same period last year while the total amount released grew by 35%.
Customers released £633.8 million of property wealth in the third quarter with 8,348 customers taking out plans compared with £470.9 million released in the same period of 2015 by 6,297 customers.
Homeowners gained an average £75,900 each by using equity release underlining the confidence in using property wealth for retirement planning. The findings show wide variations around the country with Londoners releasing £135,886 compared with £44,830 in Northern Ireland.
Key’s Equity Release Market Monitor, which analyses data for Equity Release Council members and non-members, shows the growth in amounts being released is enabling homeowners to address a wider range of financial issues.
Around 82% of customers used some or all of the cash for home or garden improvements compared with 61% in the same period last year while 41% cleared credit card and loan debts compared with 30% last year. 34% funded holidays in the past three months while 21% paid off mortgages.
Dean Mirfin, technical director at Key Retirement, said: “The equity release market has already almost matched the record performance of 2015 in just nine months highlighting how property wealth is enhancing retirement planning as other retirement income solutions are squeezed by historically low gilt and interest rates.
“The growth in the average amount released by retired homeowners is making a major difference to lifestyles with the detailed breakdown showing how most are using the cash to improve their homes while also being able to pay off debts and boost income.
“The market is on course for another record year with rate cuts for loans and new providers entering the market providing further momentum. The results also show that demand for tapping into housing equity is very much increasing throughout the UK with most regions recording record growth in plan numbers and total lending.”
Across the country nine out of 12 regions saw growth in the value of property wealth released with the West Midlands recording a 67% rise, East Midlands recording a 50% rise, and London a 48% increase. The only area to record a substantial fall was Scotland with an 18% decrease while Northern Ireland and the North West were virtually unchanged.
The biggest growth in plan sales was recorded in the West Midlands where total sales rose 59% followed by the East Midlands on 54% and East Anglia on 53%. Only Scotland reported a drop – sales were down 13% – while Northern Ireland and the North West were effectively unchanged.