Equity release market 2023

2023 is going to be an interesting year for equity release, with new consumer duty regulation coming in from the FCA and rates not seeming to go anywhere, many brokers may jump ship. Demand for equity release has clearly slowed, with many people holding off to see if rates will change, but these are the clients who want to take a lifetime mortgage for the niceties. Most of our business is coming from those who are finding the cost of living a struggle and that their pensions are not reaching far enough, or we are finding many clients who have an interest-only mortgage coming to an end and they have no way of repayment. Some are finding it's either equity release or lose their home. Equity release should be used as a last resort and not entered into without proper qualified advice.

The Equity Release market boomed in 2022 up until November when enquiries and applications fell off a cliff for most brokers.
91% of Advisors reported that January was the quietest start to a month they had ever known, however by the end of the month, enquiries started to increase.
The vast majority of our enquiries in 2023 have been for debt consolidation, whether that be paying off an interest-only mortgage (and not having to pay a monthly payment) or clearing credit card payments.

Demand for later life lending remains strong and I don't foresee that slowing in the near future with an ageing population and the amount of money that is tied up in properties. Where we have seen a shift is in relation to the purposes that people are currently exploring equity release for. With the cost of living the way it is right now, we're seeing enquiries that are more driven by financial necessity rather than some of the more discretionary luxury items. People are using equity release for home improvements or family gifting rather than that flashy holiday. Rates are creeping down in what is a competitive environment, but as with all property lending, recommendations are driven by the individual client's criteria and circumstances more than purely rate.

January saw our busiest month for equity release enquiries, and the trend was people 'needing' to consider releasing funds as opposed to just 'wanting'. Clearing a current mortgage at the end of its term, or needing the flexibility to make part-payments due to the cost of living squeeze being very common reasons. The enquiries from people who just want to release capital for luxury items, holidays or home improvements have slowed. With rates still being reasonably high I can't see this changing for a while.