Pure Retirement has highlighted the popularity of modern equity release products among owners of high value properties – who in turn are also using the released funds for more aspirational (as opposed to needs-based) reasons.
The lifetime mortgage lender’s research found that 19% of all completed new initial advances in Q1 of this year came from owners of properties of at least £550,000, with 8% coming from the £550,000-£699,000 valuation banding alone. Additionally, 4% of new initial advance completions came from those with properties of at least £1m.
Looking at the fund usage among those with a property value of at least £550,000, Pure Retirement also found that 22% of them primarily used released funds for home improvements, with 19% using them to repay debts and mortgages (a reduction of 3% and 2% compared to overall statistics across all property value bandings, respectively).
15% were using released funds for holidays (4% higher than across all property bandings), while 11% used housing equity to purchase cars (2% higher than overall figures across all property bandings).
Paul Carter (pictured), Pure CEO, said: “These latest figures only serve to underline the way that equity release has become an increasingly mainstream tool that suits a wide variety of circumstances and needs – irrespective of whether that’s aspirational or needs-based borrowing, or where in the housing value spectrum.
It confirms the need for flexible products that can cater for a diverse audience, and we look forward to continue to help using findings such as this to shape our future thinking and product offering to deliver best outcomes and effective solutions for those exploring later life lending.”
