Homeowners in Greater London are increasingly using equity release to pay off mortgage debt and gift to relatives, figures from Canada Life show.
In the capital nearly half (44%) used equity release to clear a mortgage, while just over a third (35%) have done so nationally.
Alice Watson, head of marketing and communications at Canada Life Home Finance, said: “These figures demonstrate the flexibility of equity release as a tool for financial planning in retirement.
“While elsewhere in the country the use of equity release for home improvements tends to be more predominant, in the capital homeowners are finding it more useful as a way of clearing residual mainstream mortgage debt.
“Interestingly, London’s homeowners are also using equity release to support family members. Given higher property prices and the standard equity release loan-to-value ratios available to the capital’s homeowners, being able to access larger sums may be motivating them to be more generous to relatives.
“All in all, the wide range of uses for equity release pays testament to the increased comfort homeowners have with the product and the growing willingness of over 55s to view their property wealth holistically, as akin to their other savings and assets.”
London homeowners over 55 are also more likely to use equity release as a way of unlocking funds to help family members.
Over a quarter (26%) of cited gifting to family as a reason for using the home finance product, going up to nearly a third (32%) when the proportion who used equity release to help relatives onto the housing ladder (6%) was added.
Nationally, the total figure is closer to one in five (19%), 16% used equity release to gift to family, with just 3% gifting specifically to help relatives become first-time buyers.
Other popular uses among Greater London homeowners include home improvements (46%), consolidating unsecured debts (30%) and day-to-day living (27%), though these figures are more in line with national averages (50%, 25% and 20% respectively).