The total value of new business came to £1,154.3 million, with total home reversion business accounting for £73.5 million worth of new business in 2006, up almost 35 per cent from 2005. However, lifetime mortgage business saw a marginal increase of 3 per cent.
The figures also showed steady growth in drawdown mortgages. During Q4 2006 £89.9 million was taken from £202.9 million committed new business. This compared to £14.2 million taken from £31.3 million of committed new business in Q4 2005, a six-and-a-half times increase of committed new business year-on-year.
Dean Mirfin, business development director at Key Retirement Solutions, commented: “Nearly half of intermediary business is drawdown compared to 19.5 per cent of lenders’, yet drawdown offers a lower cost method of borrowing. Our concern rests with too many consumers going direct to lenders.”
Jon King, chief executive of SHIP, said: “Equity release is beginning to claim a significant place in the industry. However, it is vital the industry as a whole works together to ensure good advice is readily available to consumers and IFAs wishing to enter the market are equipped with the full range of knowledge and skills required.”
