Booming stock market on track for record year

More than £ 1bn of real estate wealth was released in the third quarter of this year, setting the stock release market on track for a record year.

These dynamic quarterly figures from Key’s Market Monitor indicate that the total funds released in 2021 could exceed £ 4 billion by the end of the year.

This research, which analyzes data reflecting the entire market, shows that in the three months to the end of September, a total of £ 1.049 billion was released from properties in the UK, an increase of 18 , 8% compared to the same quarter last year.

However, as loan volumes increased, the number of stock release plans declined 3.2% year-on-year. There were 10,333 plans signed up in the third quarter of 2021, meaning the number of plans is still below the levels seen before the pandemic.

Total equity released in the first nine months of 2021 was £ 2.989 billion. That’s just short of the £ 3.4 billion released in total in 2020 and 2019.

In the third quarter of this year, customers released an average of £ 101,593, an increase of 23% from the average amount released in the third quarter of 2020. Key says this higher figure shows customers were using these funds for “important” items, such as gifts. and debt management.

Key’s research shows that almost three-quarters of the money released (73%) was used for these two reasons. About £ 558million of the money released was used to write off debts. A total of 42 percent of the money given to family and friends was used for home deposits, while 36 percent was given as early inheritance.

The average client is 70 years old, with almost half of them (49%) having subscribed to a capital release plan in the 65 to 74 age group.

Data also shows around 75% of customers signed up with withdrawal plans in this third quarter, with the average initial advance amounting to £ 57,183, giving customers the opportunity to withdraw £ 301.5million additional.

There has also been an increase in the number of remortgage clients upon release of equity. According to key estimates, at the end of September the market had handled 3,000 cases with clients on average, going from a loan of £ 134,597 at a rate of 5.1% to 3.6%.

Key Managing Director Will Hale said: ‘Amid a pandemic, the equity release market is on track to break through the £ 4bn barrier and potentially even hit £ 4.5bn. pounds sterling by the end of the year.

“This year we have seen a growing number of people use the equity release to support families, manage their current borrowing, and use historically low rates to remortgage their existing equity release plans.”

Equity Release Council Jim Boyd says, “Stock release products may be designed for later life, but these numbers show that the benefits of accessing real estate wealth are being systematically shared across generations and increasingly. integrated into the social fabric of the country.

“A significant amount of funds continues to flow directly to family members and other beneficiaries, making equity release a tool for multigenerational financial planning. The ability to “recycle” wealth from housing is transformative for many families when it comes to the ambitions of younger generations to move forward in life. “

Key’s regional figures show that most parts of the UK have seen the value of published property wealth rise. However, there were slight declines in Scotland and the South East.

Northern Ireland leads with the value of real estate wealth released more than tripling while Wales and East Anglia grew 74.7% and 61.6% respectively while all others regions experienced a double increase.

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