Equity Release Statistics UK 2022

Equity Release is the process of turning your home’s equity into cash that you can spend as you choose. It is a common method used to fund retirement. This process can be accessed by any homeowner aged 55 and over.

Equity Release is a growing industry within the UK. In 2021 the industry broke the previous year’s record with £4.8bn in equity released by homeowners.

This quickly growing industry is a result of house prices increasing as well as inflation.

In the graph above, taken directly from google trends, we can see how the search volume related to Equity Release has increased over the last 12 months (May 2021-May 2022)

Over the past 12 months, Equity Release has seen a 44% increase in search volume.

Search insights

Over the past 12 months, the largest related search queries include bad credit remortgages, ‘4 little known truths about Equity Release’, and ‘Equity Release horror stories’. ‘4 little known truths about Equity Release’ searches had a 1,150% increase in the past 12 months.

The top related topics, over the past 12 months, includes Standard Life Aberdeen – Insurance company, Reader’s Digest – Magazine, and Standard Life – Insurance Service Company.

Will these statistics continue to rise in 2022?

Most financial advisors, 80%, believe that the Equity Release industry will continue to grow in 2022. Approximately 50% of UK-based financial advisors have noticed an increase in Equity Release enquiries. Some believe that this increase is a result of the growing media coverage of the topic. UK homeowners are now becoming more aware of the money that they can release from their homes.

Equity Release hits new records in Q1 of 2022

During Q1 of 2022, there was a 30.5% increase in the value of new equity released, and plan sales grew by 21.4%. With this increase Q1 of 2022 has set a new industry record.

We also saw a new record set on the number of customers using Equity Release to pay their mortgages. In Q1 of 2022 42% of customers used Equity Release to repay their mortgages.

There was a further increase of 7.5% in the amount of money released from Equity Release. In 2021 we saw £103,710 being the average amount released.

Equity released from existing customers in Q1 of 2022

£37 million was released by existing customers during Q1 of 2022. This will have been released through further advances or drawdown.

Plans available in Q1 of 2022

Q1 of 2022 saw 1,039 new plans to choose from when compared to Q1 of 2021. Customers in Q1 of 2022 were able to choose from 1,557 plans.

Annual change of new equity plans agreed upon

This graph shows the change of new Equity Release plans being agreed upon from Q1 2018 to Q1 2022.

General statistics from Q1 2022

There was an increase of 11% in people using Equity Release to fund holidays.

Equity releases popularity in 2021

2021 saw 76,154 customers using Equity Release, with £4.8bn being released. Although higher than the year before it remained below the peak of 85,497 that was seen in 2019.

Equity Release rates in the UK 2021

The Equity Release interest rates, in the UK, reach highs of 5.60% (AER) and lows of 2.30% (AER). The Equity Release Council noted in its Autumn 2021 Market Report that the average interest rate for Equity Release is 4.26%.

Money released through Equity Release in 2021

In 2021 there was a total lending of £4.8bn. £4.3bn of this was via new plans and 500m was released by existing customers.

What are people spending Equity Release on?

Equity Release plans created in 2021

2021 saw the creation of 40,964 new plans, which was a 2% increase from the 40,337 in 2020.

Equity Release plan extensions in 2021

Overall in 2021, there were 4,669 plan extensions agreed upon.

Most popular Equity Release plan in 2021

Lump sum lifetime mortgages were the most popular in 2021, making up 43% of all new plans.

Covid-19’s effect on the Equity Release market

Covid-19 has had a very minor effect on the Equity Release industry. There was a short period of reduced business. However, the industry quickly adapted to a new virtual system. With lockdown being lifted now the industry is continuing to grow.

Equity Release’s use in 2021

In the first quarter of 2021 25% of customers used Equity Release to repay mortgages and 12% used it to repay debts.  The second quarter of 2021 saw these figures rise to 31% and 13%.

New plans in 2021

In 2021 over 40,000 new plans were unlocked. This was an increase of 2% from the previous year, 2020. Q4 was where the majority of these new plans were created. In Q4 11,566 plans were signed.

The busiest month in 2021

The busiest month in 2021 was November with 4,164 new inquiries.