Legal and General predicts a year of renewed interest in equity release schemes and stabilisation of the property market.
A survey by Legal & General Home Finance shows that home improvements continued to be the main reason new equity release customers took out a lifetime mortgage last year – accounting for more than half of the new arrangements.
This includes adaptations to make sure a property remains suitable into retirement, alongside other types of home improvements. Analysis of English Housing Survey data by the Centre for Ageing Better suggests that 91% of homes across the country do not provide basic accessibility features, which presents particular challenges as people age.
Customers taking additional drawdowns, however, were more likely to use the value from within their homes to help supplement their income.
Craig Brown, CEO at Legal and General Home Finance, said: “Property wealth can be a valuable asset, and looking at the new customs who came to us last year we can se that home improvements continue to be the most popular use of equity release, helping people to improve rather than move.”
The company anticipates a renewed interest in lifetime mortgages as customers reconsider using property wealth as the market likely stabilises. Mr Brown added: “It’s worth bearing in mind that house prices are still significantly higher than pre-pandemic figures – up 18% up from the end of 2019 – so property still represents an important asset which homeowners are increasingly likely to draw on.
