SHIP Announce Drawdown Lifetime Mortgages 14% Sales Increase
Equity release regulator Safe Home Income Plans (SHIP) has reported a 14% quarter on quarter increase in the sale of drawdown lifetime mortgage plans.
Drawdown lifetime mortgages have become increasingly popular since the drop in house prices, as instead of selling their house the over 60s are looking to release equity from their home and wait for market to turnaround and house prices to increase. This has led to drawdown lifetime mortgages now accounting for 51% of the market.
This method of equity release is structured to allow more regular withdrawals of equity; this has led to a drop in the sales value of products sold as borrowers can take a more staged approach to cashing in on the equity in the property – taking what they need, when they want.
Impact of the increased popularity of Drawdown Lifetime Mortgages
As a result of the increase in popularity of drawdown lifetime mortgages, the 2nd quarter ending June 2009, saw the sales value of equity release plans fall to £232.9 million; compared to £245.01 in the 1st quarter.
This took the average cash amount released down to £43,712; compared to £48,287 in the first quarter of the year. Clearly showing how the drawdown mortgages are the main culprit for the lower sales values.
Equity Release Weathering the Storm – Increasing 5%
SHIP did acknowledge that compared to Q2 in 2008 the number of equity release customers compared year on year was down 22%. However, in their report SHIP also state the equity release market is showing “some signs of optimism” as the number of equity release customers rose by 5% when comparing quarter on quarter; up from 5074 in Q1 to 5328 in Q2.
SHIP’s Director General Speaks
Andrea Rozario, the director general of Safe Home Income Plans (Ship) commented on their 2nd Quarter findings: “While the equity release market is still suffering along with the mainstream mortgage market, it is encouraging to see … evidence of some positive movement.”
He adds: “The quarter on quarter increase in the number of plans shows that consumers are once more starting to believe in the UK housing market.”
For no-obligation advice on whether equity release could help you and information on the best plans please call our 24 hour helpline and speak to one of our advisors:
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Equity Release may involve a Lifetime Mortgage or Home Reversion Plan. To understand the features and risks ask for a personalised illustration.
Age Partnership provides initial advice at no cost and without obligation. Only if you choose to proceed and your equity release case completes would a typical fee of 1.5% of the amount released or £795 be payable.
Important things to consider about equity release:
- Equity release could affect your current or future entitlement to means-tested benefits
- Releasing equity to spend in your lifetime can reduce the amount that is left in your estate when you pass away
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