The twenty one members* of UK equity release industry body, SHIP (Safe Home Income Plans), that represents over 90% of the Equity Release sector, reported record first quarter figures to 31 March 2007.
Overall Business Figures
The total number of new equity release plans sold in Q1 2007 increased almost 7%, year on year, from Q1 2006 (6,363 - 2006 to 6,785 - 2007) and highlights the fourth year of consistent growth. The total value of new business written reached £293.9 million, the highest Q1 figure to date, and contributed to an annual rolling year total figure of £1,169.2 million at the end of Q1 2007.
Home Reversions
Home reversions continued to grow strongly with the number of plans sold increasing almost 14% from Q1 2006 to Q1 2007 (363 – 2006 to 413 – 2007) and accounted for £22.5 million worth of new business.
Drawdown Mortgages
Whilst lifetime mortgages accounted for 94% of new business for SHIP members in Q1 2007, it was drawdown mortgage options that persisted in popularity. These plans accounted for 40% of all new equity release business in Q1 2007 compared to almost 20% in Q1 2006 and 7% in Q4 2005, when drawdown schemes were first introduced.
During Q1 2007 £92.9 million was taken from £198.5 million committed new business compared to £45.1 million taken from £87.0 million of committed new business in Q1 2006.
Increased interest amongst intermediaries
The number of equity release plans sold via intermediaries in Q1 2007 increased almost 17%, year on year, from Q1 2006 (3,368 – 2006 to 3,925 – 2007) and accounted for 58% of all new business. Such growth highlights a growing understanding of the equity release market amongst IFAs and the business potential it represents.
Jon King, chief executive of SHIP commented: “The number of new equity release plans sold in Q1 2007 represents a record first quarter for SHIP members when figures are compared year on year, with drawdown products clearly proving popular amongst consumers.
“The amount of business arranged through intermediaries, however, is also encouraging. With SHIP’s compulsory deadline of 1st August to hold a lifetime mortgage examination it is hoped that this growing proportion of business from IFAs will be matched with relevant and necessary advice for the consumer.”
