Total equity release advances highest for two years

Safe Home Income Plans (SHIP), a “trade body” for equity release providers, has recently released its figures for the last quarter of 2011, which show a marked increase in total advances.
Director General of SHIP, Andrea Rozario, commented:
“We are delighted to report that not only did total advances reach a two-year high in Q4 2011 but this is the third quarter of growth in equity release sales.  This is excellent news and puts the industry on track for a strong 2012”.
SHIP members saw total advances of £215.9 million made in the fourth quarter of 2011, the highest level since Q4 in 2009 (£231.7 million), and considerably higher than the levels seen in the same period last year (£188.5 million).
Whilst this is a good sign for the equity release market could it be said that the increase in equity release advances is simply a sign of the real financial struggle that home owners are facing?
Chairman of Equity Release Solicitors Alliance (ERSA), Claire Barker, commented:
“It has long been predicted by those in the business that conditions were ripe for equity release to flourish and these SHIP figures appear to prove them right. In these rocky financial times, equity release provides a way for the older generation to untie some of the wealth that they have built up in their property to pay for expenses such as home renovations or helping out their nearest and dearest. It is a big year for the industry and with the consolidation of advisers, solicitors and providers under one banner, this can only benefit the consumer, and consolidate the reputation of equity release.”
Many who have released equity could be helping their children, or even grandchildren, get that much needed foothold on the property ladder.  If this is the case could the increase in equity release advances also lead to an increase in first-time buyers?
SHIP acknowledge that this increase in confidence in the housing market is still tentative, with many choosing to reserve a share of the equity, accessing it in smaller chunks.  Reversions now only account for 2 per cent of the market, with lump sum mortgages accounting for 36 per cent and drawdown accounting for over half of the market.
Andrea Rozario added:
“This year promises to be a significant one in SHIP’s history as we will be expanding our membership to include intermediaries, solicitors and other interested stakeholders.  By the end of Q1 2012, we intend to announce the outline of the new body which will work to promote the benefits of these products and ensure consumers receive access to suitable products”.
Today’s Conveyancer, bringing you the latest conveyancing news and updates.
Today's Conveyancer