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Equity Release Supermarket News Understanding later life lending: Trends around the Christmas season
Understanding later life lending: Trends around the Christmas season
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Equity Release Supermarket News Understanding later life lending: Trends around the Christmas season

Understanding later life lending: Trends around the Christmas season

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Megan Williams
Checked for accuracy and updated on 10 December 2024

As the festive season approaches, families join together to celebrate the festivities and to catch up. For some, this may be a perfect time to discuss plans for the future, and for homeowners aged 55 and over, later life lending solutions may be one such item for discussion.

Our aim is to inform and educate homeowners who may be looking to learn more about their financial solutions. In this article, we will look at the trends and demographics from real customers who completed with Royal London Equity Release, following the 2023 Christmas period*.

Who chooses equity release?

From our data, we see that a wide range of individuals apply for equity release, but certain trends stand out. The average age of applicants is around 67, with a significant number falling into the 65-69 age bracket. This is often when people are settling into retirement and reassessing their financial needs.

Homeowners who completed a Royal London Equity Release Lifetime Mortgage following the 2023 Christmas period had properties with substantial value. On average, these homes are worth about £522,500, though most fall in the £300,000 to £400,000 range. This indicates that many have accumulated significant property wealth and may see this as one opportunity for financial support in later life.

How much do people usually choose to release?

When looking at the financial side, the initial amount of equity released typically averages around £72,800, with many homeowners choosing to release about £51,100 initially. This can provide a useful financial cushion, especially when supplemented by pensions or other income sources.

The Loan to Value (LTV) ratio is another important metric. An LTV ratio is a percentage that compares the amount of money you borrow to the value of the property you're buying, and lenders use LTV ratios to assess the financial risk of a mortgage application. For homeowners who completed following the 2023 Christmas period, LTVs averaged at 17%. Most applicants borrow conservatively, with nearly half of them staying within the 20% to 30% LTV range. This cautious approach ensures that homeowners retain a significant portion of their property's value. Use the Royal London equity release calculator to ascertain how much you could borrow.

Why do people opt for equity release?

The reasons for choosing equity release can be varied, but some common themes emerge in the data we gathered. The primary motivation, especially around Christmas, is home improvements. Nearly 40% of applicants use the funds to enhance their living spaces, making their homes more comfortable for holiday gatherings or just for everyday enjoyment.

Another significant reason is mortgage repayment. Around 29% of applicants use equity release to pay off existing mortgages, possibly alleviating obligatory monthly financial payments and providing greater financial flexibility in retirement, as homeowners can opt to make repayments on a schedule that suits them. Other reasons include providing an early inheritance to family members (11%) and supplementing retirement income (9%).

Regional trends in equity release

Equity release is popular across the UK, but certain regions see higher concentrations of applicants. This may be influenced by local property values and economic conditions. In December of 2023, we noticed a higher concentration of application around the south of England, where house prices are typically higher than other areas of the UK.

Preferences and demographics

When examining the demographics of our applicants, we find that joint applications are the most common, making up 57.6% of the total. Single female applicants represent 27.1%, while single male applicants account for 15.3%. This suggests that equity release is a popular option for couples, as well as for single individuals looking to improve their financial situation. There is also a notable interest from homeowners in both rural (37.5%) and suburban (35.4%) areas, indicating that our homeowners may have different lifestyles across the UK.

Making the most of the festive seasons

As Christmas approaches, many homeowners consider equity release to improve their homes, secure financial stability, or share wealth with loved ones. The flexibility of equity release makes it a versatile solution to meet different financial goals. By understanding these trends and the reasons that other homeowners across the UK choose to explore their later life financial options, you may feel more informed to make a decision about your own options in retirement.

It’s crucial that you speak with an equity release adviser to understand how the value of your home will be reduced if you explore equity release, and it could affect your entitlement to means tested benefits. If you’re curious about how later life lending could work for you this festive season, speak with a dedicated adviser and take the time to explore your options, to see how you can unlock the value in your home for a more secure and fulfilling retirement.

*Statistics taken from Responsible Review Demographics Power BI Report. (2024). Overview of Applicant Demographics by Application Date and Lender (RLER). Retrieved 12.11.2024.

“Royal London Equity Release” is a trading name of Responsible Lending Limited. Responsible Lending Limited uses Royal London branding under licence from Royal London Marketing Limited. “Royal London”, the “Royal London logo” and “Royal London Equity Release” are registered trademarks of The Royal London Mutual Insurance Society Limited. Responsible Lending Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference 763158. Registered in England and Wales under company number 09801855. Registered office: Princess Court, 23 Princess Street, Plymouth PL1 2EX. Responsible Lending Limited is a wholly owned subsidiary of the Royal London Group. Being a wholly owned subsidiary of the Royal London Group does not alter Responsible Lending Limited’s regulatory responsibilities.


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