Home improvements continued to be the most popular use of equity release for Legal & General Home Finance customers over the last year, as people invest in their forever homes.
17 Jan 2024
New data from Legal & General Home Finance shows that home improvements continued to be the primary reason that new equity release customers took out a lifetime mortgage last year (51%)1. Customers often used their lump sum to invest in improving their forever home. This includes adaptations to make sure a property remains suitable into retirement, alongside other types of home improvements. Analysis of English Housing Survey data by the Centre for Ageing Better suggests that 91% of homes across the country do not provide basic accessibility features, which presents particular challenges as people age2.
In addition to home improvements, customers took out lifetime mortgages to help get their finances in order. This includes debt consolidation (21%) and paying off mortgages (26%).
Customers taking additional drawdowns, however, were more likely to use the value from within their homes to help supplement their income (23%).
Craig Brown, CEO, Legal & General Home Finance: “Property wealth can be a valuable asset and, looking at the new customers who came to us last year, we can see that home improvements continue to be the most popular use of equity release, helping people to improve rather than move.
“As we look ahead to the rest of 2024, we anticipate a renewed interest in lifetime mortgages as customers reconsider using property wealth as the market likely stabilises. It’s worth bearing in mind that house prices are still significantly higher than pre-pandemic figures (18% up from the end of 2019), so property still represents an important asset which homeowners are increasingly likely to draw on3.
“We’re also seeing more innovation in the market, bringing a greater range of products, like our new payment term lifetime mortgage, to give a broader range of solutions to a wider pool of customers.”
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
Legal & General Retail helps create brighter financial futures for all our customers. The division covers the savings, protection and retirement needs of our c.13 million retail policyholders and workplace members.
In 2022, we had total individual annuity sales of £954 million, and issued £632 million of Lifetime Mortgages and Retirement Interest Only Mortgages. Our Workplace pension platform served 4.9 million members, while our Protection businesses gave peace of mind to more than 6.3 million UK life insurance, 1.8 million group and 1.5 million US customers, taking in £3.1 billion of gross written premiums.
*at 31 Dec 2022