Over £400 million was released in Q1 2016 a new record
Many babyboomers who have large amounts of equity tied up in their homes have been borrowing record levels against their properties with over £400 million borrowed in the first 3 months of 2016.
These types of loans have high interest rates and the loan can quickly grow if not paid off.
Simon Chalk, equity release expert at Age Partnership, said: “For those in or reaching retirement, the rising demand to tap into the wealth tied into people’s homes comes as the struggle of first-time buyers continues to spread across the media.
“Many equity release customers are recycling the wealth from their homes to help children and grandchildren onto the housing ladder.”
Dean Mirfin, technical director at Key Retirement, said: “Pensioners are cash poor but property rich and tapping into their housing wealth can help reduce debts as well as supplement other income, freeing up capital for them to afford a more comfortable standard of living or help out family and friends.”
Key Retirement found that a third of customers where clearing other debts such as credit cards or old mortages.
The following chart shows the growth in equity release loans since 2011