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Equity release allows homeowners aged 55 and over to gain access to the value of their property by turning it into cash.
A recent market analysis by mortgage broker, Henry Dannell, reveals that the amount of wealth being released through equity will surpass £6.5 billion by 2025.
Equity release grows in popularity
UK homeowners released £790 million worth of property wealth for themselves via an equity release product in 2011, yet since then this figure has increased.
In 2021 £4.8 billion of property wealth was unlocked through equity release. Henry Dannell claims that based on historical trends and property market performance the amount of wealth being released will exceed £5 billion this year, top £6 billion by 2024, and reach £6.5 billion by 2025.
Experts owe the growing popularity to the increasing number of products available on the market. Over the past two years, the number of products in the market has increased by 65.8%.
Director of Henry Dannell, Geoff Garrett, concludes: “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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