UK Home Equity Lending Market - Growth, Trends, COVID-19 Impact, And Forecasts (2022 - 2027)

The UK Home Equity Lending Market can be segmented by Types, (Fixed Rate Loans, Home Equity Line of Credit (HELOC)), By Service Provider, (Banks, Building Societies, Online, Credit Unions and Others), and by Mode (Online and Offline).

Market Snapshot

uk home equity lending market size
Study Period: 2018-2027
Base Year: 2021
CAGR: 5 %
 uk home equity lending market share

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Market Overview

Many firms encountered uncertainty as a result of Covid-19, which resulted in job losses or reduced pay. As the crisis drags on, banks, credit unions, and other lenders continue to take a cautious approach to lend, putting some of their products on hold. The Home Equity lending market especially Home Equity line of credit (HELOC) is impacted by the Corona-virus pandemic. During the COVID-19 pandemic, some of the country's top banks declared that they would no longer be accepting new HELOC applications.

Homeownership in the United Kingdom was at a declining state since early 2000. The highest homeownership in the early 2000s had hit low after the global financial crisis. There have been some signs of improvements and homeownership is recovering slightly in the last couple of years. The number of UK citizens investing in 'buy to let property has increased dramatically over the past year. Property has become a popular alternative to traditional investments and pensions, as it provides both rental income and capital growth. Buying the investment property is tough and requires a large cash reserve. It is a slow process and needs a cash reserve of 20-30 % of the total investment so, Investor are utilizing the home equity lending and home equity line of credit for investment in property. A home equity line of credit may be a preferable option for an investment property if the investor can agree on the amount to be borrowed and then withdraw the funds only when needed. Once an investor has located an investment property, they can borrow the funds they need – for a deposit, a cash purchase, or to cover costs – and only pay back the funds after they have utilized them. Home equity loans of credit are generally flexible, allowing the borrower to repay the loan and redraw it at a later period. So, if an investor purchases an investment property, he or she can develop it and resell it, and can use the proceeds from sale to repay the home equity line of credit.

Scope of the Report

Home equity lending allows homeowners to get credit based on how much equity they have in their homes. Lenders normally allow homeowners to borrow up to 80 percent of their home equity in a lump sum, which may be a big figure for those who have paid off a major portion of their mortgage or who own their property outright. This report aims to provide a detailed analysis of Home equity lending in the United Kingdom. It focuses on the market dynamics, emerging trends in the segments, the future of markets, and insights on various drivers and restraints. Also, it analyses the key players and the competitive landscape in the market. The UK Home Equity Lending Market can be segmented by Types, (Fixed Rate Loans, Home Equity Line of Credit (HELOC)), By Service Provider, (Banks, Building Societies, Online, Credit Unions and Others), and by Mode (Online and Offline).

By Product Type
Fixed Rate Loans
Home Equity Line of Credit
By Service Provider
Banks
Building Societies
Online
Credit Unions
Others
By Mode
Online
Offline

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Key Market Trends

Raising Homeownership Rate is Driving the Home Equity Lending Market

The homeownership rate in the United Kingdom is recovering from the global financial crisis when the homeownership rate hit its lowest in the year 2013-2014. Home equity lending provides the credit for the homeowners based on their equity in the property so increasing homeownership is a positive sign for the home equity lending market. The increased residential property sales in the United Kingdom also show increased preference of the UK citizens for the property investment. The use of homeowners equity and home equity line of credit for property investment is increasing gradually in the United Kingdom.

uk home equity lending market forecast

There is Growing Interest for Home Equity Releases in the United Kingdom

According to a survey of homeowners in the United Kingdom, 22% of current workers intend to use the value of their property to support their retirement, owing to the country's record home price hikes. A third of all non-retirees own a home yet have less than EURO 10,000 in their pension account. Based on an examination of median property prices, the average homeowner in England and Wales may access almost USD 100,000 in equity release, which might considerably improve the retirement of the 70% of over 65s who are 'state pension dependant' but also homeowners. In the fourth quarter of 2020, more than GBP 600 billion of equity was available for release in UK houses.

uk home equity lending market analysis

Competitive Landscape

Home Equity Lending Services are provided by high-street banks, Online banks, Building Societies, Credit Unions, and other institutions. Residents of the United Kingdom have access to a few – but not many – home equity loan companies that offer equity loans and HELOCs. Many banks offer home equity lending in the UK but it is more common to find a Home equity line of credit (HELOC) than home equity loans. Since different forms of companies offer home equity lending products, the market for home equity lending is fragmented in nature.

Recent Development

  • In February 2022, Selina Advance, a London-based fintech business, has raised USD150 million in investment to expand its home equity lending solutions to customers across the UK. The round of fundraising, coordinated by global private equity platform Lightrock, included USD 35 million in equity and USD 115 million in loans from Goldman Sachs and GGC to help the company expand across the UK.
  • On February 2, 2022, Santander announced its decision to stop originating residential mortgages and home equity lines of credit (HELOCs) . Santander will continue to service existing home loans and lines of credit received till February 11, 2022.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS AND DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Driver

    3. 4.3 Market Restraints

    4. 4.4 Porters 5 Force Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

    5. 4.5 Insight on Technologial Adoption in the Market

    6. 4.6 Insight on Various Government Regulations in the Market

    7. 4.7 Impact of Covid 19 on market

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Product Type

      1. 5.1.1 Fixed Rate Loans

      2. 5.1.2 Home Equity Line of Credit

    2. 5.2 By Service Provider

      1. 5.2.1 Banks

      2. 5.2.2 Building Societies

      3. 5.2.3 Online

      4. 5.2.4 Credit Unions

      5. 5.2.5 Others

    3. 5.3 By Mode

      1. 5.3.1 Online

      2. 5.3.2 Offline

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 Barclays Bank

      2. 6.2.2 Bank of England

      3. 6.2.3 Selina Advance

      4. 6.2.4 Aviva UK

      5. 6.2.5 Nationwide Building Society

      6. 6.2.6 Coventry Building Society

      7. 6.2.7 Royal Bank of Scotland

      8. 6.2.8 Legal and General

      9. 6.2.9 LV Friendly Society

      10. 6.2.10 Onefamily*

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. DISCLAIMER AND ABOUT US

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Frequently Asked Questions

The UK Home Equity Lending Market market is studied from 2018 - 2027.

The UK Home Equity Lending Market is growing at a CAGR of 5% over the next 5 years.

Barclays Bank, Bank of England, Selina Advance, Aviva, Nationwide Building Society are the major companies operating in UK Home Equity Lending Market.

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