New Equity Release Council data has highlighted that, in terms of customer numbers, lifetime mortgages became the fastest growing segment of the mortgage market during 2016.
According to the report, the volume of lifetime mortgage customers saw a 22% rise last year, surpassing buy to let re-mortgaging at 16%. The growth rate of equity release lending between 2015 and 2016 was 34%: more than double the 16% seen from 2014 to 2015.
Other segments of the mortgage market had a mixed year in 2016: while re-mortgaging numbers grew 14% and first-time buyer numbers by 8%, the volume of home mover mortgages fell by 2% while buy to let purchase mortgages fell 13% from 2015.
In 2006, there was one new lifetime mortgage agreed for every 27 home mover mortgages and 43 re-mortgages. By 2016 this had reduced to one lifetime mortgage every 13 home movers and 14 re-mortgages respectively.
Equity release products saw the most significant fall in rates across all mainstream personal borrowing options.
At the same time, the number of products available to customers has continued to rise along with the flexibilities these offer, including downsizing protection, capped variable interest rates, and options to make monthly interest payments or annual capital repayments without incurring a charge.
Drawdown mortgage products continued to be the most popular type of equity release plan in 2016, with 65% of new customers opting for drawdown compared to 35% opting for lump sum mortgages.