SHIP, the trade body for equity release providers, released the market figures for the first quarter of 2012 last week.
Total advances were up by 10 per cent, £199.1 million for total advances, compared to £181.6 million for Q1 of 2011. According to SHIP, traditionally there is a fall in the number of plans sold between Q4 and Q1 to account for the festive season. This tradition saw an 8 per cent fall in the last quarter, £215.9 million for Q4 of 2011.
The steady increase is, according to SHIP, due to an increased confidence from consumers and a better awareness of equity release as a way to enhance finances. The increase is the highest for 4 years now but still below the Q3 2008 figure of 72 per cent.
The percentage of drawdown mortgages increased by 5 per cent (up from 62 per cent in Q4) but home reversions accounted for just 2 per cent of the market. The increase in drawdown mortgage plans can probably be attributed to a desire to supplement monthly income, rather than receive a one-off lump sum.
Commenting on behalf of SHIP, Andrea Rozario, Director General, commented:
“These figures are extremely encouraging and show that the market is continuing to grow steadily, year on year. Furthermore, the increase in the number of customers electing to drawdown their housing wealth in stages reflects the growing awareness for the different uses of housing equity — such as supplementing an existing income.
“This year is a significant and exciting one for SHIP, as we expand our membership to include members from across the equity release industry. This will allow us to provide an even more comprehensive look at equity release sales figures in the future through the expansion of data available from new members.
“These figures show that there is a growing appetite amongst consumers for equity release products, and by bringing together organisations from across the industry we will ensure that we are well placed to meet this demand.”
While Stevie Wilkie, Managing Director of equity release specialist, Responsible Equity Release says:
“The toxic combination of high debts, high inflation and high unemployment has stretched many people’s incomes to breaking point and the money tied up in our houses is providing a degree of relief.”
It appears that equity release is no longer something that those close to retirement consider.
Today’s Conveyancer, bringing you the latest conveyancing news and updates.