The latest Equity Release Council figures show that lending in Q2 2018 is close to £1bn.

Steve Wilkie, managing director of Responsible Equity Release, comments:

“It’s staggering to think that seven years on, an industry that lent less than £200m in Q2 2011, is now closing in on the £1bn mark for the latest quarter.

“There are a number of reasons why equity release targets are being smashed every quarter and indeed every month.

“We are seeing more movement in lifetime mortgage rates due to increased competition from new lenders entering the market.

“These rapid-fire price changes seem to be happening on a weekly basis and are attracting new audiences to equity release.

“Product innovations continue to benefit consumers, such as more options to repay plans early, and transparency over what charges are incurred when you do pay down early is building trust.

“We also see the biggest driver of new business as the number of items on our customers’ shopping lists. This is driven by equity release becoming a family affair; with more needs and wants to attend to.

“Historically, equity release has been driven by homes and holidays; with two thirds of our customers naming improvements to the home and a third listing holidays as the main usage.

“Whilst these items are still close to the top of the list, customers are also choosing to plan ahead and invest into their family’s futures. They are looking at the gifting of an early inheritance at a time when it’s needed the most and where the whole family can reap the rewards later.

“Additionally, while pension funds are free to be passed on from generation-to-generation, property falls under IHT rules so it’s often more effective to look to the home to provide a retirement income.”