The figures are finally in for the whole of 2014, and they show the equity release market had its most successful year yet in terms of lending. Indeed, it was also seen to have had its best year since the recession kicked in a few years ago.
The Equity Release Council (ERC) shows that the level of lending reached £1.38 billion during 2014. This represents a leap of nearly one-third over the course of just 12 months – 29% more than in 2013 to be exact. Previously the equity release market had seen a high point of £1.21 billion. This was achieved in 2007 before the recession began.
More customers flocking to the marketplace
2014 was also a bumper year in terms of the number of customers who sought out the opportunity to release equity from their properties. A total of 21,336 new customers entered the marketplace during 2014. This represented the highest figure seen since 2008. It was also 13% up when compared to the previous year.
There was also a rise in terms of the amount of cash released from the average property. The average of £64,787 released in 2014 was equivalent to an increase of 14% over the previous year.
Changing moods and times
There are many reasons why people are now viewing equity release as a real option when it comes to considering their finances for their retirement years. Firstly the outlook is somewhat different with regard to leaving property to descendants. While this was seen as a traditional move in times gone by, it is not as traditional nowadays. Many people are relying on the money they have built up over the years to see them through retirement. In many cases this means unlocking the value that has built up in their homes.
Secondly new reforms in the pensions market are coming into force this April. This will enable people to take control of their retirement finances without the need to follow set rules and regulations. Furthermore it looks as though these reforms may push through further growth in the equity release market as well.
The importance of seeking advice
While many more people are considering equity release as a potential way to free up more cash for their retirement years, it is important to note many experts suggest the need for professional financial advice to be sought. This is an important decision to make and one that should only be made with the appropriate information available.
There is no reason to suggest the equity release market will not experience further improvements in 2015. The forthcoming pension changes could well see many more people seriously considering the idea of seeking equity release as they take a wider view of their finances in retirement. Some will no doubt choose to downsize rather than releasing equity, but this largely depends on the history of the home and whether or not it still suits the needs of those living there.