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Equity Release Council Q2 2024 report: "due to NHS delays as a result of the pandemic, we've seen people turning to equity release to fund hip or knee replacements"

ended 25. July 2024

Following the publication of the Equity Release Council’s Q2 2024 report this morning, Newspage asked brokers and equity release experts for their views on the findings — and the main trends they're seeing in the equity release sector at present. Their views are below.

4 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
Whilst the uptick in enquiries has been steady throughout 2024, the most common trend has been for both mortgage and debt repayment, a sign that the financial squeeze has become prevalent in all age groups. Interest-only mortgages arranged 25 years ago need to be repaid, and with savings and investments used for the day-to-day bills, older borrowers have little option but to seek such products. We have also seen more situations where ownership has become an issue, with married couples where properties were traditionally in the husband's sole name. A limited number of lenders will look at such cases and more needs to be done to plug these gaps in the market.
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Simon Bridgland
Director at Charwin Private Clients
Borrowers being stonewalled by traditional lenders unwilling to help due to age and income has resulted in a significant uptick in equity release enquiries during the second quarter. Needs-based reasons continue to tip the scales for releasing equity, with many borrowers pressing for the maximum available loans. This trend is set to continue with high numbers of interest-only mortgages ending and personal debt increasing. Nearly four in 10 of our own enquiries relate to paying off existing mortgages and other debts whilst just under three in 10 are for a mix of debt or mortgage repayment and more enjoyable reasons. This quarter however has seen a return in desire-based reasons with a little over 33% releasing cash for things such as home improvements, gifting or holidays. Overall borrowers are seeking relief from their debt, but still find themselves either too old for a traditional mortgage or too young for the amount they need from a lifetime mortgage lender.
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Scott Gallacher
Director at Rowley Turton
Despite the interest rate rises we've seen over the last couple if years, equity release is certainly more popular. Driven in part by the cost of living crisis, we've seen people wanting money out for solar panels, replacement boilers to help lower their energy bill. Due to NHS delays as a result of the pandemic, we've also seen people turning to equity release to fund hip or knee replacements. There's little point having capital tied up in your home but being unable to enjoy your retirement due to a dodgy hip or knee. Perhaps the key concern is the impact that equity release can have on the inheritance you might leave. Though that's more of a concern for your children than you.
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Iain Swatton
Director at Exemplar Financial Services
Recent trends in Q2 indicate a growing interest in equity release, though high rates are causing hesitation among many potential applicants. Innovative products, such as payment term lifetime mortgages and improved withdrawal arrangements, are making equity release more appropriate and cost-effective. Homeowners are considering equity release to bolster retirement income and support children or grandchildren with property purchases, among other essential reasons. While RIO Mortgages and interest-serviced options present alternatives, they aren't always affordable for everyone.