Equity Release hits new lending high of £5.58 billion
- New plans rise by 25% and the value of equity released grows by 27% but mini-budget impacts volumes in the final quarter
- Customers focus on prudent financial management with £3.3 billon used to repay secured or unsecured debt
- Key’s 2022 Full Year Equity Release Market Monitor shows total release of £6.3 billion including existing customers
While the mini-budget in September 2022 saw a slow down in the later life lending market in Q4 2022, strong performance across the rest of the year saw the market hit a record high of £5.58 billion in new lending, new data from the UK’s leading equity release adviser Key Later Life Finance shows.
Plan sales grew by 25% compared with last year to 52,295 – more than 4,300 plans a month – while the value of new equity released increased by 27% to £5.58 billion. Once borrowing by existing customers via drawdown and further advances is included total borrowing hit £6.3 billion.
Although the long-term drivers of the market remain strong, interest rates which increased sharply in Q4 and the reduction in the number of products available saw lending volumes plateau following the September mini-budget. Traditionally, the strongest quarter of the year, Q4 2022 saw more modest lending amounts (£101,366) than Q3 (£108,180) as customers constrained by lower LTVs were cautious about borrowing.
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