Mortgage repayments soared 20% to hit a record £ 38bn in the first half of 2021.
This surge in mortgage repayments has surprised even the experts.
The Equity Release Council has released its Fall 2021 Market Report. This iteration has found that mortgage repayments have skyrocketed by 20% to hit a record £ 38bn in the first half of 2021.
Meanwhile, the option is for lifetime mortgages to double in recent years and two years, which, combined with low rates and flexible features, increases the appeal of using the capital release to help meet subsequent financial needs.
Among their findings are those:
- UK home equity repayments have risen 20% year-on-year, bringing the total amount of debt repaid in the first half of 2021 to an unprecedented £ 38bn, equivalent to £ 200m per day or £ 3,500 for each mortgaged home.
- The trend has been fueled by record highs of regular repayments and overpayments, new loans before the Stamp Duty deadline, and fewer mortgage payment holidays.
- The Nation now carries more than £ 1.5 trillion of mortgage debt for the first time in history, but factors including increases in house prices mean that for every £ 1 of mortgage debt, there is more than £ 3 of equity in our houses.
- The total value of UK property stocks has risen from £ 5.67 trillion to £ 6.42 trillion over the past year, and private property wealth has reached a new high of £ 4.87 trillion.
- Life mortgage product options have doubled in the past two years, which, combined with low rates and flexible features, adds to the appeal of using equity release to help meet downstream financial needs.
“We haven’t seen something like this before.”
David Burrowes, Chairman of the Equity Release Council, said: “UK households are converting unprecedented amounts of home loans into real estate as we seek to overcome the worst of the pandemic. Combined with property price increases driven by the Stamp Duty holiday, homeowners have record value that they can potentially draw on in the future. The transformation of later life mortgages in recent years has given people more opportunities to access their greatest source of wealth.”
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