Equity release passes £3bn in 2017

Retired homeowners released more than £3 billion in property wealth using equity release in 2017, a report shows.

According to analysis by Key Retirement, last year saw record growth of more than £1 billion in the equity release market, which expanded by 41% since 2016.

A total of 38,955 new plans were taken out in 2017, with the average pensioner releasing £77,380 of wealth from their home.

The majority (64%) of people who released equity used it for home or garden improvements.

Other popular options included going on holiday (33%), paying debts (31%) and treating or helping family or friends (24%).

Dean Mirfin, chief product officer at Key Retirement, said:

"Expansion in the market is being driven by customer demand as retired homeowners' confidence in making full use of their property wealth continues to grow.

"More lenders are launching in the market in response to demand and that in turn is increasing competition, driving down rates and bringing new innovative features to the market.

"Expert advisers increasingly recognise how property wealth makes a major difference for retirement income."

There are 2 main types of equity release: lifetime mortgages and home reversion plans.

Lifetime mortgages

A lifetime mortgage is a type of loan which allows you to borrow a portion of the value of your home without having to sell or move house.

The amount you receive will depend on your age (the older you are, the more you can borrow) and the value of your property.

You retain full ownership of your home and don't have to pay the loan back until you die or go into long-term care.

The money can be taken as a lump sum or in smaller amounts up to a maximum agreed limit.

Home reversion plans

Home reversion plans involve selling all or a percentage of your house for less than the market value to a home reversion company.

You will also get a lifetime lease which allows you to stay in your home rent-free for life.

Like a lifetime mortgage, the money can be taken as a lump sum or regular payments.

However, the home reversion company will benefit from any rise in property prices on the part of the property they own.

Advantages and disadvantages

It's important to consider the potential impacts of releasing value from your home. Here are some of the ups and downs to consider with equity release:


  • you don't have to move house
  • you can use the lump sum or income to supplement other income 
  • you will normally be able to remain in your home until you die or go into long-term care
  • you still own your home.


  • your home will fetch less than full market value if you sell it through some types of equity release
  • a lump sum or regular income could affect your entitlement to some benefits
  • your spouse or civil partner may have to move out if the plan ends on your death
  • you may not be able to transfer the scheme to a new property if you wish to move
  • you may be charged if you repay the loan early.

Finally, be aware that equity release is just one of several ways to free up some of the value in your home.

Whether equity release is the right option for you depends on your individual circumstances, and it's always best to seek expert advice before you decide if equity release is right for you.

Speak to us about equity release.