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Record cash from equity release due to rising cost of living

Cash accessed using equity release increased 24% last year as homeowners benefit from rising property value to meet living costs.

The strong rise in house prices allows homeowners to access cash rising 24% from £3.86 billion in 2020 to £4.80 billion in 2021, according to data from the Equity Release Council.

People releasing cash from their home for the first time was up 2% from 40,964 in 2021 compared to 40,337 the previous year but down on the activity in 2018 with 46,397.

The last quarter of 2021 was the busiest of the year with 11,013 new lifetime mortgage plans agreed although this was less than 2020 with 11,566 plans.

Rising house prices help release cash

House prices have been rising at 6.2% pa nationwide since the lockdown as homeowners priorities have changed and need more indoor and outdoor space.

Property values for the year to November 2021 were up £25,000 on average with the town of Taunton in the South West up 21.8% or £56,546 and Newark in East Midlands higher by 20% or £46,732.

Lifetime mortgages loan to values based on age means more cash is available with higher house prices and more affluent customers are using equity release to improve quality of life or gifting to their family.

See how you can access wealth from your home to repay an existing mortgage and take extra cash at this link:
Equity release calculator for instant results and figures for your property.

The £4.8 billion of equity release for 2021 increased by 24% over the previous year but was less than the mortgage market as a whole which grew at 31%.

Of the new plans in quarter four, 61% selected a drawdown lifetime mortgage taking an upfront amount of £89,786 with £34,950 in reserve for the future and those taking a lump sum averaged £124,990.

Interest rates remain near their lowest levels of 2.84% with lower loan to values which means homeowners are in a position of leaving equity for beneficiaries in the future.

Returning customers taking more cash

The amount of cash released by returning customers increased from £11,476 last quarter to £12,501 in the fourth quarter 2021 and could be due to the rise in the cost of living.

In total there were 76,154 customers taking out equity release including new plans, drawdown reserves and agreeing extensions up 4% over the previous year but still lower than the 2019 peak of 85,497.

New lifetime mortgage plans accessed £4.3 billion in 2021 and returning customers for drawdown cash over time was £500 million.

Across the UK there were 30,521 customers taking drawdown which is a rise compared to the previous year of £28,902 but 20.6% lower than the 2019 peak of 36,426.

Providers have been improving the flexibility of equity release to increase their appeal and bring lifetime mortgages closer to residential mortgages with capital plus interest payments and long term fixed rates.

For those intending to repay your current interest only mortgage, equity release allows you to continue to pay interest as you go and at any time to stop payments and let the interest roll-up.

What are your next steps?

Speak to our London City Mortgage advisers if you need to repay an interest only mortgage, we can recommend the lifetime mortgage plan and manage the application through LCM.

Find out more about releasing cash and the leading lifetime mortgage products for your property with this link:
Free equity release quote with leading products and low interest rates.

Our expert advisers can source competitive products suitable for your needs to release wealth. Learn more by using the equity release calculator, property value tracker chart and mortgage costs calculator.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%
1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%

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  • IMPORTANT

    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.

  • WARNING

    Equity Release - Equity Released from your home will be secured against it. Mortgages – Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it. Think carefully before securing other debts against your home. The information contained in this website is subject to the UK regulatory regime and is therefore intended for consumers based in the UK.

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