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Equity release lending soars past £900 million

Equity release lending soars past £900 million

Equity release lending rose by £198 million in the first half of 2016, the biggest year on year increase in the last ten years. 

The total amount lent by equity release providers hit £908 million in the six months to 30 June 2016, according to figures released by the Equity Release Council.

This was 28% higher than sales of £710 million recorded in the same period last year.

This £198 million increase was the biggest rise in equity release sales over the last ten years, topping the £160 million increase recorded in the first half of 2014.

According to the Equity Release Council, much of the growth is down to a 34% increase in the number of equity release products available on the market over the last three years. 

Many providers have launched equity release products since former chancellor George Osborne announced the introduction of pension freedoms in his 2014 Budget speech.

Dean Mirfin, technical director at Key Retirement, linked the £198 million increase in lending to a rise in house prices and a reduction in equity release rates across the market.

'The 10-year high for equity release market growth highlights how the combination of record low rates for plans and house price growth is making the case for how property wealth is increasingly supporting retirement planning,' he said.

Not all coverage of the increase in equity release lending has been positive though. 

The publication of the figures follows comments made by Financial Conduct Authority chief executive Andrew Bailey, who sounded a 'note of caution' about using equity release to fund retirement. 

The regulator also recently suggested that advisers wishing to recommend equity release products should have to complete a specialist qualification on the topic. 

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