The annual research conducted by Safe Home Income Plans (SHIP) – a body that represents over 90 per cent of the equity release sector – shows that the total value of new business over the last quarter was £317.4 million, taking 2006’s total to £1,154.3 million.
Increases were also witnessed by both home reversion plans and lifetime mortgages in the final quarter of 2006, with the total number of new plans sold increasing by 19 per cent on the last quarter of 2005.
In addition to these promising figures, total home reversions business saw another impressive increase year on year, accounting for £73.5 million worth of new business in 2006 – up almost 35 per cent on 2005. However, lifetime mortgage business slowed over the last twelve months with only a 3 per cent rise on levels in 2005.
Drawdown mortgages were a large part of 2006’s success story and saw steady growth across the months. The final quarter of the year saw £89.9 million taken from a total of £202.9 million committed new business, which is a dramatic six and a half times increase in year on year committed new business.
SHIP’s chief executive, Jon King, commented: “It is clear that equity release is beginning to claim a significant place in the mortgage industry and its benefits are becoming more apparent to those at which it is targeted – the number of customers keen to use flexible drawdown mortgages is also highly encouraging.”
“If anything is to be learnt from the SHIP members’ survey, it is that the industry as a whole must work together to ensure good advice is readily available to these consumers, and that IFAs wishing to enter the market are equipped with the full range of knowledge and skill required.”
