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Equity release news
Jon King,
Equity release sector stable
managing
director of
Equity release volume has value of the equity release market Andrea Rozario, Director
remained broadly stable and the from £303.3 million (Q3 2008) to General of SHIP, commented on
Hodge
average amount released rose 19% £236.2 million (Q3 2009). the figures: "The drop in the
and £7,245 YOY, according to However, as the number of number of plans sold can be
Lifetime,
SHIP’s figures for Quarter 3. customers has fallen by 35%, the partly attributed to the funding
The figures show there was a 1.2% average amount released per issues that the industry is
comments on
increase in market value (the total customer has increased by 19% currently facing. While equity
amount taken via equity release from £38,189 to £45,434. release providers are experiencing
your growing
plans) in this quarter from £233.3 Around 74% of all equity high levels of customer demand, a
million (Q2 2009) to £236.2 release plans were sold through significant impact on the quarter's
target market
million (Q3 2009). Intermediaries, compared with business figures has been the lack
The number of new equity 26% direct sales. This is a 10% of liquidity in the overall market
Marketeers are always keen on
release customers (market increase on Q2 2009 and in line which has restricted the lending
volume) dropped by 2.5% quarter with the pattern for increased activity of some providers and
talking about target markets,
on quarter from 5333 to 5198. sales through intermediaries that resulted in the withdrawal from
the ‘X’ or ‘Y’ generation, high
However, this is an increase of 2% was established in 2007 and 2008. the market of some others.
net worth et al. And of course
on Q1 2009 results (5074). This trend has been accelerated by "Following on from the launch
these markets are largely
This quarter showed a 3.9% the reduced number of direct of our Discussion Paper this
influenced by the socio-
increase in the average amount providers and therefore the summer, SHIP urges the
economic conditions in the
released through equity release, increased percentage of equity Government to launch a review of
country being considered. The
rising from £43,746 (Q2 2009) release plans now available equity release, and explore how it
one genuine worldwide trend is
to £45,434 (Q3 2009). This is a through intermediaries. can take its appropriate place in
the fact that the population is move that could be seen to Drawdown is now the most the retirement planning sphere.
ageing. According to a recent reflect renewed consumer popular form of equity release, SHIP is working hard to ensure
study by the National Institute confidence in the stability of with 52.2% of the market. This is that consumers, government and
of Ageing, the number of
house prices. a rise of 4.6% on Q2 2009. Lump funders are aware of the need for
people over 65 is on course to
In comparison to the wider Sum plans now make up 46.2% of a retirement planning option
overtake the number of
remortgage market, which has the market. This leaves Home based on property wealth, and
children under five for the first
seen a decline of 63%, this year Reversions to make up the how equity release can fulfill this
time in human history.
has seen a 22% decrease in the remaining market share of 1.6%. need."
Of course this has all sorts of
implications for the
sociologists to consider and Key’s Market Monitor shows growth
cogitate on, not least the
resulting pressure it will bring
Key Retirement’s Equity Release increase from 57% in quarter 1. throughout 2009 is very
on health services, care and of
Market Monitor shows an This results in lower initial encouraging. Pensioners are hard
course who’s going to pay for it
increase in both plan numbers advances because clients hold hit by the current climate,
all.
and values released in quarter 3 of funds in reserve for later rather experiencing higher rates of
Successful businesses of the
2009. than taking them now. inflation and previously unknown
future will, as they always have
The report shows that the results The report highlights some of low levels of returns on their
done, identify and work with
for quarter 3 of 2009 improve the regional variances including savings, as a result equity release is
social and demographic change
further on those achieved in lending habits, looking at the providing a strong support for
to maximise the opportunity. quarter 2 over quarter 1. The total popular uses of equity release. those who want to maintain a
Whilst an ageing population is number of plans taken out during The latest report reveals that debt good quality of life in retirement.
not the only trend in town, it’s the third quarter of 2009 was and mortgage repayment has We expect the last quarter of the
arguably the most significant 6,123 (2009 quarter 2 – 5,143,
increased in popularity increasing year to be equally strong as more
change the world has seen since
quarter 1 – 4,703,) representing to 36% and 23% respectively. confidence emerges.
the impact of world wars on
an increase of 19% over quarter 2, The year to date result ”Whilst a number of providers
population mixes. As our
which itself exceeded quarter 1 by compared to the same period for have temporarily had a break
actuary recently said, “the
9%. 2008 is also very encouraging. from the market of late we expect
increase in longevity has been
The total amount released also Overall the number of new plans that a number will soon return,
going on for 200 years, it’s not
increased by 13% to £214 million taken is 15% down year on year stronger and wiser. The demand
likely to stop any time soon”.
(2009 quarter 2 - £188.9 million, which is an improvement on for greater income or capital in
If you are finding business
quarter 1 – £183 million). Whilst quarter 2 which showed a 17% retirement is continuing to grow
difficult, maybe its time to ask
overall lending has increased the variance from 2008. and as a result equity release has
average loan has fallen by 4% Dean Mirfin, Key Retirement to be a serious consideration for
yourself are you targeting the
against quarter 2 with drawdown Solutions group director, said: anyone who wishes to boost their
right customers?
representing 65% of all plans “The continued growth in the provision in, or approaching, their
from 64% in quarter 2, an number and value of plans retirement.”
November 2009 Mortgage Introducer www.mortgageintroducer.com
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