The total amount of equity released by homeowners, including buy-to-let landlords, was up 5.8% in May compared to the previous month, fresh data from Responsible Equity Release shows.
The equity release market continues to perform strongly despite an uncertain residential housing market, with the total number of equity release plans taken out by homeowners in May increasing by 10% month-on-month, according to the equity release provider.
But despite the increase in the total amount of equity release and the number of completed plans, the average amount of equity released by residential property owners dropped marginally last month, down 4.1% on April to £72,877.
The average amount released by individual homeowners reached a high of £87,035 in January and has fallen every month since, owed in part to the existing economic landscape and homeowners taking more caution over financial decisions.
Regionally, Yorkshire and the Humber saw the biggest increase in the amount of equity released by individual homeowners, up 27.4% in May to £50,575, compared to £39,688 in the previous month.
Steve Wilkie, managing director, Responsible Equity Release, commented: “The equity release market is proving extremely resilient to economic and housing market conditions. The number of homeowners taking out plans and the total amount of equity released were both up in May.
“Although the average amount of equity released by individuals has fallen slightly, particularly in London, we have seen an increase in the amount of equity in reserve which can be tapped into if and when needed.
“Not surprisingly, the amount of equity London homeowners are taking out has fallen, but this illustrates how much the product has matured and how people view equity release. It is not a product to be used recklessly or in haste and instead provides a valuable financial solution. We spend a lot of time with homeowners assessing their needs to see if equity release is the right product for them. It is not for everyone.
“However, with a greater range of flexible products available to a wider audience, equity release now offers a genuine retirement income solution, and a financial buffer in the face of poor performing savings accounts and investments.”