New LV= figures show that home and garden improvements continue to be the main reason why customers release equity from their homes, accounting for three out of ten (31%) loans in 2017. In fact, since LV= entered the market a decade ago it has consistently been the most popular reason for taking out equity release.
However, the figures also highlight that households are still feeling the squeeze as, last year, one in five (20%) used the money from their homes to ‘top up’ their income and pay bills. A similar proportion (19%) used the money to pay off mortgages, loans or debts, a 26% increase from 2016 (15%) and up from 5% in 2015.
The numbers also show an increase in people releasing equity to help or treat family and friends, with one in ten (11%) LV= customers doing so compared to 8% the previous year.
Mike Farrell, Equity Release Sales Director at LV=, said: “At LV=, we continue to see people using the equity in their homes to make their lives more comfortable through home and garden improvements. However, we are increasingly seeing people use their property to provide additional financial security in their retirement; whether that’s simply for peace of mind or to help them cope with an unexpected financial shock.
“People are spending longer in retirement, and often someone’s largest asset is their home, so it’s no surprise people increasingly want to access money tied up in their property to provide additional income. We strongly advise people considering this option to speak to a professional financial adviser about whether it is right for them.”
It’s important that people receive the necessary support when making financial decisions that can have a large impact on their lives. Equity release is a complex product and anyone considering it should seek financial and legal advice, as well as asking for views from their family or any beneficiaries of their will.