SHIP announce 16% increase in average equity release sum
The average equity released by homeowners showed an annual increase of 16% from £41,718 to £48,287, as many looking to supplement lower savings incomes and tougher economic conditions, according to the latest figures from Safe Home Income Plans (SHIP).
Ship revealed the total value of equity release business in Q1 of 2009 was £245.01m, down from £245.8m in 2008. The actual number of loans was down by 14% year on year from 5,892 to 5,074.
In Q1 of 2009 65% of all new equity release plans were sold by intermediaries – an increase from the 63% of market sales sold by intermediaries in 2007 and 2008. Ship said this development came from an increasing trend of independent financial advisers adding equity release to the in-retirement products they advise on.
The director general of SHIP Andrea Rozario, said it was encouraging to see how resilient the equity release market was, especially considering the fact that consumers had 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. She added: “The relative stability of the market in such turbulent financial times is very pleasing. There remains a clear need for equity release products, which is becoming ever more important as pensioners feel the pinch from the recession. We remain realistic yet positive about the next quarter’s results, and expect to see exciting market and product innovations as companies adapt to meet the changing needs of their clients.”
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