In 2009 almost 30% of all Bridgewater Equity Release’s customers were planning to use the released cash to repay their mortgage.
As part of its customer application form, Bridgewater provides 15 options and asks the customer to choose the one which they plan to spend the majority of the released money on. Bridgewater has analysed its completed applications over the last three years which has revealed the top reasons why customers are opting to release equity through a home reversion plan.
The home improvement option has increased in popularity over the last three years increasing to just over 17% in 2009 while the numbers using their released equity to consolidate debts fluctuated over the three years but increased to 15% last year.
Other popular reasons given for what the money would be spent on included the purchase of specific goods, for example, the popularity of purchasing a vehicle almost doubled between 2008 and 2009 with over one in 10 customers choosing this option. Also 6.5% of customers intended to use the money to either buy a holiday home or property, when no-one used the money for this purpose back in 2007. Using the money to increase retirement income or enhance their lifestyle was an option with a similar level of popularity 6.5% of customers chose this option in 2009.
Peter Welch, head of sales and distribution at Bridgewater Equity Release, said: “As a provider of home reversion plans it is important we understand the reasons why our customers choose to release equity through their home. This is also the case for equity release advisers by understanding the motives of the client they can best direct their marketing effort to those customers with the appropriate needs. With these results we can see that customers continue to have three main reasons for releasing equity: repayment of the mortgage
