Total number of equity release customers up in Q1
The Equity Release Council has reported a 4% increase in the number of new and returning customers using equity release products in the first quarter of 2024, with 14,216 individuals engaging with these services from January to March, up from 13,651 in the previous quarter.
Returning customers contributed to a 6% rise in drawdown activity, signalling a steady confidence among those with existing plans.
During this period, 56% of new customers chose drawdown lifetime mortgages, marking the highest quarterly uptake since the Bank of England began increasing its base rate from 0.1% in late 2021.
Despite the rise in drawdown popularity, the overall number of new customers decreased by 11% compared to the fourth quarter of 2023. This decline, coupled with a trend towards drawdown products, led to a total lending figure of £504 million in the first quarter, a decrease of 6% from £535 million in the preceding quarter.
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“The Q1 2024 data highlights the ongoing challenges facing the residential property market in the UK as the nation waits to see what happens next with interest rates and the health of the economy,” said David Burrowes (pictured), chair of the Equity Release Council.
“In our market, consumer confidence is holding up well among people with existing plans, who are not shy of making use of drawdown facilities or exploring further advances. New customer numbers are lower than last year with feedback from the market suggesting that older homeowners are adopting a more cautious approach to borrowing as there are hopes of interest rate reductions in the near future.”
Burrowes also pointed out the growing appeal of modern lending products that offer flexibility, allowing customers to tailor their borrowing to their individual needs. He noted that new customers are opting for drawdown plans with smaller initial advances, and existing customers are moderating their borrowing amounts.
“As we look to the rest of 2024, we are confident that the green shoots that we are starting to see will germinate and the market will return to growth,” he said. “Structural drivers of the later life lending sector are only due to intensify over the coming years, and council members are ready to support clients as they make sustainable long-term choices about their finances.”
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