Understanding Equity Release in 2024 | As the cost of living rises and retirement planning grows more complex, more homeowners are considering equity release. At Connect Lifetime, we provide clear, expert advice to help you make informed and confident decisions. This article examines the current equity release market, based on the latest data from the Equity Release Council, and highlights the importance of seeking advice.
What is Equity Release?
Equity release enables homeowners aged 55 and over to access the wealth accumulated in their properties. There are two main forms of equity release:
Lifetime Mortgages: You borrow a portion of your home’s value, with interest added and repaid after your death or moving into care.
Home Reversion Plans: You sell part or all of your property for a tax-free lump sum or regular payments. You retain the right to live there rent-free for life.
Key Trends from the 2023 Equity Release Market
The Equity Release Council’s 2023 market statistics highlight a period of change and stability:
Total Market Activity: Homeowners released £4.2 billion of property wealth in 2023. This was down from £6.2 billion in 2022 but remained the fourth-highest figure recorded.
New Plans: Approximately 26,119 new plans were agreed in 2023, compared with 49,285 in 2022. Economic uncertainty and rising interest rates influenced this change, though demand continues steadily.
Repayments and Flexibility: Increasingly, more homeowners are opting for voluntary or partial repayments. Flexible products have grown, helping manage the overall cost of borrowing.
Product Innovation: Over 70% of plans now permit penalty-free repayments. This development gives homeowners greater control over their borrowing.
| Category | Q4 2023 | FY 2023 | Comparison / Notes |
|---|
| New & Returning Customers | 13,651 | 64,448 total active customers | -31% year-on-year decline |
| New Equity Release Plans | 13,651 | 26,119 new plans | -47% compared to 49,285 in 2022 |
| Drawdown Lifetime Mortgages | 55% of new customers opted drawdown | 53% preferred drawdown | Preference shift back to drawdown products |
| Average Borrowing (New Customers) | £79,484 | N/A | Down from £106,917 (Q4 2022) |
| Drawdown Initial Borrowing | £62,198 upfront + £40,962 reserved | N/A | Total loan size down 22% vs Q4 2022 |
| Lump Sum Borrowing | £100,978 | N/A | Down 21% vs £128,382 in Q4 2022 |
| Total Lending | £535 million | £2.61 billion | Down from £6.2 billion in 2022 |
| Market Activity Level | Quietest quarter of 2023 | Returned to 2016-2017 levels (£2.1bn-£3.1bn) | Post-record 2022 correction |
Why Are Homeowners Considering Equity Release in 2024?
Several common reasons explain why equity release is being considered:
- Supplementing retirement income to maintain a comfortable lifestyle.
- Clearing outstanding mortgage debts before retirement.
- Funding essential or desired home improvements.
- Helping family members with deposits for purchasing their own homes.
- Covering rising everyday living costs amidst continued inflation.
Equity release can provide financial support, but it is essential to understand its impact on inheritance, long-term costs, and state benefit entitlements.
Equity Release in 2024 |Why Speak to Connect Lifetime?
At Connect Lifetime, we provide comprehensive and FCA-regulated advice to help you make informed choices.
Independent and Unbiased Advice: We research the whole market to find products that meet your individual needs.
Expert Knowledge: Our advisers maintain up-to-date knowledge of market trends, regulatory changes, and new product developments.
Personalised Service: We take time to understand your complete financial circumstances, future aspirations, and any concerns you may have.
Transparent and Ethical: We proudly adhere to the Equity Release Council’s standards, promoting honesty, transparency, and consumer protection.
Important Considerations When Thinking About Equity Release in 2024
Before proceeding, it is crucial to consider the following points carefully:
- Equity release will reduce the value of your estate.
- It may affect your eligibility for means-tested state benefits.
- Early repayment charges may apply, depending on your plan.
- Independent legal advice is a requirement before completing a plan.
We recommend discussing all aspects with a qualified adviser to understand both the benefits and risks.
Looking Ahead| The 2024 Outlook for Equity Release
The market is expected to continue evolving, with greater product flexibility anticipated. Lenders are focusing on offering tailored features such as:
- Interest repayment options.
- Downsizing protection.
- Fixed early repayment charges.
These innovations offer homeowners more choice and control when it comes to accessing property wealth safely and responsibly.
Equity Release in 2024 |Speak to Connect Lifetime
Equity release is a major financial decision that should not be taken lightly. Professional advice ensures you fully understand your options, rights, and obligations.
Our experienced team is here to help you make informed decisions for your future. Contact Connect Lifetime today to arrange a consultation with one of our expert advisers.
If you’re considering equity release and would like advice tailored to your specific needs, please don’t hesitate to contact Richard Turner today. We can help you explore your options, ensuring your home remains yours for life.
Thank you for reading our “Equity Release in 2024 | Expert UK Advice from Connect” publication. Stay “Connect“-ed for more updates soon!
