Eq­uity re­lease de­mand slides amid pan­demic tur­bu­lence

The Daily Telegraph - Business - - Business -

◆ The num­ber of new eq­uity re­lease plans en­tered in the first half of the year tum­bled to 18,420, a 15pc fall against the same pe­riod last year, as the Covid pan­demic dis­rupted the prop­erty mar­ket and fi­nan­cial plan­ning, writes Michael O’Dwyer.

Among cus­tomers who al­ready had eq­uity re­lease con­tracts in place, fewer sought fresh cash ad­vances, and with­drawals were smaller than in the pre­vi­ous six months, ac­cord­ing to fig­ures from the Eq­uity

Re­lease Coun­cil. David Bur­rowes, its chair­man, said that there were “ini­tial signs of a re­cov­ery in June”.

Eq­uity re­lease al­lows cus­tomers to un­lock part of the value of their home and re­ceive cash, ei­ther in a lump sum or in sev­eral smaller amounts, on which they pay in­ter­est. The sec­tor has at­tracted crit­i­cism as com­pound­ing in­ter­est can in­crease cus­tomers’ debts and wipe out in­her­i­tances.

The av­er­age in­ter­est rate on an eq­uity re­lease loan hit a record low of 4.1pc in July.

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