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TODAY'S OTHER NEWS

Dramatic surge in equity release sales

Equity release has posted the biggest quarterly rise for 11 years as over-55s withdraw a record £5 million of housing wealth each day.

The third quarter saw the highest annual growth rates recorded so far in 2015, with the number of new plans exceeding 6,000 for first time since 2008.

Figures from the Equity Release Council, published today, also showed that total lending for the first nine months of this year has exceeded the total for the whole of 2013.

It claimed the figures show that equity release is "breaking new ground"

Drawdown lending hit £266.8 million in Q3, up more than £68 million on the previous quarter to the largest amount on record.

Total Q3 lending rose 21% year-on-year, compared with 18% annual growth in Q2 and 3% in Q1, to reach £452.6m.

Nigel Waterson, chairman of the Equity Release Council, said the appetite among over-55 homeowners for tapping into their housing wealth continues to grow. 

“There is increasing awareness that equity release can offer many benefits in later life by providing people with extra income or the means to meet other costs and expenses. 

“The months ahead will see important discussions with regulators and government about how to build on this foundation.”

Stephen Lowe, director of external affairs for Just Retirement, said customers are using equity release payouts for a wide variety of reasons.

“Some are releasing lumps sums to pay off mortgages or other debts early in retirement. Some are using the funds to provide an income boost to help pay the bills.

“Others are spending the money on their homes, or care needs, or treats for themselves or their families.

“And in some cases people are giving it away now so it won’t be taxed and they can see the benefits it brings.”

Lowe said that continued low interest rates, shortfalls on interest-only mortgages and the delay to the cap on care costs are among the factors likely to underpin demand.

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