The total value of equity release business written in Q1 2009 was £245.01 million (Q1 2008: £245.8m). The average sum released rose 16% year on year from £41,718 (Q1 2008) to £48,287 (Q1 2009) as customers look to release more initially to compensate for lower savings incomes and tougher economic conditions. However, the actual number of loans sold fell by 14% year on year from 5,892 (Q1 2008) to 5,074 (Q1 2009).
In Q1 2009, intermediaries sold 65% of all new equity release plans – a slight increase from the steady 63% of market sales sold by intermediaries in 2007 and 2008. This development is believed to stem from an increasing trend of independent financial advisers adding equity release to the stable of in-retirement products they advise on.
Andrea Rozario, Director General of SHIP, commented: “It is encouraging to see how resilient the equity release market is, especially when you consider the fact that consumers have become increasingly cautious about borrowing and the performance of the financial services sector as a whole.
“While there is a long-term trend towards drawdown products, Q1 2009 saw greater increase in the number of lump sum mortgages sold as potentially some consumers who may be worried about further house price falls and low savings rates look to release higher amounts.”
