The equity release market, particularly lifetime mortgages, continues to evolve and serve a diverse range of homeowners. According to the latest data from Pure Retirement, the average property value for new lifetime mortgage customers has increased in the fourth quarter of 2024 compared to the same period in the previous year. This data underscores the growing interest in lifetime mortgages among homeowners across different property values.
For customers considering a lifetime mortgage, this trend highlights that equity release solutions are becoming an increasingly accessible option, regardless of the size or value of the home. The data reflects the wider scope of homeowners turning to this financial product to access the equity in their properties. In this article, we’ll explore what these figures mean for potential customers and how they reflect the changing landscape of the lifetime mortgage market.
Key Highlights from the Latest Data
The latest figures from Pure Retirement reveal that the average property value for new lifetime mortgage customers in the fourth quarter of 2024 stood at £400,900. This figure marks a noticeable increase from the £391,300 average seen in the fourth quarter of 2023. While this represents significant growth, it's important to note that the property value for new customers has slightly dipped from the mid-year peak of over £423,000. Nevertheless, the overall increase year-on-year is a positive sign for the market and shows that lifetime mortgages remain a popular choice for homeowners looking to release equity from their homes.
The rise in average property value is important for several reasons. It reflects the broader market trend of increasing home values, but it also signals that homeowners with higher-value properties are increasingly turning to lifetime mortgages as a solution to meet their financial goals. This could be for a variety of reasons, including retirement planning, funding home improvements, or simply supplementing income in later years.
Distribution of Property Values Among New Lifetime Mortgage Customers
A breakdown of the data reveals interesting patterns in the types of properties involved in lifetime mortgage plans. The statistics indicate that lifetime mortgages are continuing to serve a wide variety of homeowners, with differing property values and financial needs. The fourth-quarter data shows that approximately 39% of new lifetime mortgage plans were taken out on properties valued between £250,000 and £399,000. This is an increase from 37% in the third quarter of 2024, which suggests that homeowners with properties in this price range are increasingly finding lifetime mortgages to be an effective financial solution.
For homeowners with properties in the £400,000 to £699,000 range, around 24% of new lifetime mortgage plans were taken out. This marks a slight decrease from 27% in the third quarter of 2024 and 25% in the same quarter of 2023. While this may seem like a small drop, it’s important to recognise that a large percentage of the market still falls into this mid-range property value category. Homeowners in this bracket typically have more options when it comes to lifetime mortgages, whether they want to access their equity for personal or financial reasons.
A particularly noteworthy trend is the increasing share of lifetime mortgages being taken out on higher-value properties. In the fourth quarter of 2024, the proportion of new lifetime mortgages for properties valued between £700,000 and £999,000 reached the highest level it has been in the past 12 months. This group now accounts for 7% of new business, compared to 5% in the third quarter and 6% in the fourth quarter of 2023. This increase reflects growing interest in lifetime mortgages from homeowners with more valuable properties, who are often looking for ways to release substantial equity to support their retirement plans or other financial goals.
Why Lifetime Mortgages Are Gaining Popularity Across Property Values
One of the key reasons for the rise in lifetime mortgages across various property value brackets is that this later life financial product can offer a flexible and secure way for homeowners to access funds without having to sell their property or move into a new home. Lifetime mortgages allow homeowners to release equity from their property, either as a lump sum or in smaller instalments called drawdown, while retaining ownership of their home. The loan is repaid, with any applicable interest, when the homeowner either passes away or moves into long-term care.
As property values continue to rise, many homeowners find themselves sitting on a large amount of untapped equity in their homes. Lifetime mortgages allow them to unlock this equity to use for various purposes, such as funding home renovations, paying off existing debts, or simply boosting their retirement income. For those who are living in properties that have appreciated in value, this can be a powerful financial tool to help achieve their goals and secure their future.
Furthermore, lifetime mortgages have become more appealing to a wider audience because of their flexibility and the fact that they don’t require monthly repayments. This makes them particularly attractive for specific homeowners who may be living on a fixed income, or have other financial priorities. The increasing popularity of lifetime mortgages among homeowners in different property value brackets demonstrates that the product is adaptable to a variety of needs and circumstances.
A Diverse Customer Base
Paul Carter, the CEO of Pure Retirement, commented on the latest data: “The figures we’ve seen in the fourth quarter of 2024 demonstrate the diversity of customers that lifetime mortgages continue to serve. It’s clear that no matter the value of their property, many people are turning to lifetime mortgages as a practical solution to help them reach their financial goals.”
This comment reinforces the idea that lifetime mortgages are no longer a niche financial product reserved for those with only high-value homes. Instead, they are a valuable option for a broader spectrum of homeowners who are looking to unlock the value in their properties, whether to supplement retirement income, fund life’s big expenses, or achieve other financial goals.
What This Means for Potential Customers
For potential customers considering a lifetime mortgage, the latest data highlights the growing popularity and flexibility of this option across various property types and values. Homeowners from a range of property values are increasingly turning to lifetime mortgages to access the funds they need for a more comfortable and secure future. Whether you own a property valued at £250,000 or over £700,000, lifetime mortgages could offer an effective way to release equity from your home.
As the equity release market continues to evolve, it’s important for customers to carefully consider their personal financial situation and explore all available options before making a decision. Consulting with a trusted financial adviser who specialises in lifetime mortgages can help ensure that this solution is the right fit for your needs and circumstances.
In conclusion, the data from Pure Retirement underscores the growing appeal of lifetime mortgages for homeowners across different property values. As the market continues to expand and serve a diverse range of customers, more people are finding that lifetime mortgages can provide a flexible and secure way to meet their financial goals in retirement.
