• c
  • c
  • c
  • c
  • e
  • c
  • e
  • e
  • b
  • b
  • b
  • a
  • r
  • t
  • r
  • r

May 19, 2022

Property Wire – Record number of older homeowners turn to equity release

Older homeowners accessing the value held in their homes via lifetime mortgages and other forms of equity release are directly adding nearly £1.8 billion in GVA across the UK economy, according to a new report from Legal & General and the Centre for Economics and Business Research (CEBR)1. Spending funded by equity release is further estimated to support nearly £1.1 billion in in ‘indirect’ effects on GVA, as well as £0.9 billion in ‘induced’ effects of equity release spending on GVA2, bringing the total impacts on UK economic activity to £3.8 billion.

£4.3 billion released from UK property wealth

The report found that in 2021, a record £4.3 billion was released via lifetime mortgages and other forms of equity release – an 11% annual increase. This money, previously tied up in the significant property wealth held by the UK’s over 55s, was then spent across a range of sectors as homeowners supported family members, achieved their goals and boosted their incomes with the extra funding. The wholesale and retail sector benefitted most from the extra cash unlocked (18% – £757 million). A significant share of the equity release funds was spent on the human health and social work sector (12% – £517 million), likely due to the significant care spend of this age group.

The ripple effect of equity release spending

In addition to direct equity release spending across various sectors, the report also reveals the wider economic benefits generated as a result. For example, money spent on home improvements, a common reason for taking out a lifetime mortgage, not only benefits the contractors completing the work but will also benefit their suppliers. The report estimates the positive impact of equity release across supply chains and to employees supported just under £2 billion in GVA in 2021. This means that for every £1 spent as a result of equity release, a total of £2.12 in terms of economic activity is supported across the UK economy.

Through its contribution to the UK economy, equity release spending by homeowners also supports job creation in a range of sectors across the country. Spending funded directly by equity release generated more than 45,000 jobs. A third of this total, equating to 15,300 roles, are found in the health and social work sector, due to the high spend on care costs. Taking into account the indirect supply chain effects, and induced effects of this spending, modelling undertaken by Cebr estimates that an additional 35,000 jobs are supported as a result of equity release’s impact on the economy.

The site uses cookies, as explained in our cookie policy. If you agree to our use of cookies, please close this message and continue to use this site.

Accept & Close