Home improvements remain popular use of equity funds, says L&G

Home improvements remain the most popular use of equity release funds from a lifetime mortgage among 54% of homeowners, according to data from Legal and General Home Finance. With people looking to enhance home efficiency and potentially lower bills, new lifetime mortgage applicants are also looking to access equity to help pay off existing mortgages and fund more comfortable retirements. With the government recently announcing the allocation of nearly £2bn to retrofit homes towards net zero, L&G believes that it’s likely homeowners will face further nudges in coming years to make their homes more sustainable. Examples of energy-efficient improvements include installing double glazed windows, installing insulation, or replacing boilers. In the first three months of 2023, 25% of L&G’s existing customers continued to draw down funds to supplement and support everyday living expenses amidst a backdrop of high inflation and challenging living costs. L&G’s data also shows that those over the age of 55 are still looking to support their family with housing deposits and gifting, as 9% of existing customers included this as a reason for drawing down additional funds, while 13% of new applicants said they intend to share their housing wealth. New application data also indicates that, after home improvements, paying off an existing mortgage is one of the most popular uses of funds with 23% of customers, as people use the equity in their home to set up for retirement. Craig Brown, CEO of Legal and General Home Finance, said: “Our data shows lifetime mortgages are playing an important role in long term financial planning and that making a home comfortable and sustainable in the long term continues to be a popular use for funds. We also know that many people see releasing equity from their property as a way to provide a ‘living inheritance,’ with the opportunity to see loved ones benefit from the money when they need it most. “It’s important to note that equity release is a lifelong financial commitment and won’t be suitable for everyone. Anyone considering applying for a lifetime mortgage must speak to a financial adviser to be clear about all the options available to them.”

Home improvements remain popular use of equity funds, says L&G

With the government recently announcing the allocation of nearly £2bn to retrofit homes towards net zero, it’s likely homeowners will face further nudges to make their homes more sustainable

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