While official figures from SHIP, the equity release trade body, show that around 50% of equity release business is comprised of clients taking out drawdown schemes, these plans make up 65% of NBSERS' business. This indicates that that the flexible nature of drawdown schemes is proving to be the most effective option for many clients.
NBSERS has also witnessed a significant reduction in the time taken from customer enquiry to taking out an equity release policy. Lead times have reduced by 35%, from 140 days in Q3 2007 to 91 days in Q3 2008. Increased awareness of the equity release market and the subsequent benefits of taking out a plan may be a key reason for this.
The number of introducers has also grown within Newcastle's equity release business - increasing by 50% year-on-year, as a result of new contracts with organisations like the Institute of Professional Willwriters and The Will Writing Company, as well as a further deal to be announced soon. The Society has a strategy in place with a wide range of introducers as part of an approach to searching and developing the relationship it has with introducers of all sizes rather than being the lender.
Bob Mottershead, Retail Sales Executive at Newcastle Building Society says: "NBSERS Q3 figures show that the equity release sector is surviving the credit crunch and in some instances is witnessing growth. A key indicator of this is drawdown schemes which remain popular and represent 65% of NBSERS business.
"In the current economic climate, lead times have reduced from clients enquiring about equity release products to taking out a plan. This could be due to the fact that customers are more informed about equity release and are aware of the benefits of taking advantage of the amount of equity in their property to free up some much-needed cash.
"Customers also appear to be moving away from the more traditional reasons for taking out equity release plans including home improvements and holidays, by looking to equity release as a means of supplementing their income."
