Statistics published last week by the BoE are not for bespoke equity release products, but for all remortgages for purposes other than a new house purchase.
SHIP (Safe Home Income Plans) has sought to clarify the numbers published earlier this week by the Bank of England, as they are causing much confusion in the media.
The statistics reported by the Bank of England show a very dramatic fall (64%) in the year-on-year amount of money being taken from equity held in property through remortgaging for purposes other than purchase of another property. Unfortunately, many observers are taking this to apply to volumes in the bespoke equity release market when this is NOT the case.
Equity release product sales did fall in Q1 this year, as reported by SHIP, but by only relatively small 13%. Most of this decline was attributed to the impact on consumer confidence caused by the collapse of Northern Rock and the dramatic beginnings of the so-called “credit crunch” – a hit that would show in Q1 because of the time taken to process equity release business.
SHIP’s members have in fact been reporting that volumes are holding up reasonably well in the current market circumstances.
