The amount of wealth being released through equity release could pass £6.5 billion by 2025 after more than a decade of increasing popularity and growth, according to new market analysis from Henry Dannell mortgage brokerage.
Back in 2011, UK homeowners released £790 million worth of property wealth for themselves via an equity release product.
This figure increased steadily over the ensuing decade, with annual growth reaching as high as 42%. Just two years (2019 and 2020) reported any kind of drop in wealth release totals, but the largest of these drops being 0.8%.
Overall, in the ten years following 2011, the amount of property wealth being freed up through equity release increased by 508%, reaching the 2021 total of £4.8 billion.
Based on the past decade of growth trends, Henry Dannell has calculated that the amount of wealth being released will surpass £5 billion this year, pushing past £6 billion by 2024, and hitting £6.5 billion in 2025.
One reason for the growing popularity of equity release is the increasing amount of products available on the market. In the past two years alone, the number of products has increased by 65.8%, from 401 in 2020 to 665 in 2022.
Director of Henry Dannell, Geoff Garrett, commented: “The benefits of equity release are clear – free up some personal wealth while maintaining the right to live in your home. It’s of no surprise that it’s an option more people are now opting to take up.
“Indeed, the only reason it has taken until now for the amount of money released to reach £5 billion is public awareness and the accessibility of related products.
“I think it’s also fair to say that societal attitudes towards inheritance may be changing. Older people, who may be parents, grandparents, or even great-grandparents are less likely to wait before gifting their wealth to their family and loved ones. Instead, they’re seeing how difficult it is for young families to save for their first home, as an example, and choosing to provide financial support at a time when they’re still around to see the joy their hard-earned lifetime of wealth can bring to the people they most care about.
“As the current cost of living crisis starts to throw more and more people into financial and emotional difficulty, I would expect to see an acceleration in the number of people choosing the equity release option in order to support themselves and their families.”
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