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Equity release
Drawdown plans continue to dominate the Mirfin is also upbeat about the prospects of lending will start recovering as they begin to
market due to their prime benefit of reducing the the equity release market throughout the next 12 come out of the curve and we will potentially see
overall cost of borrowing. During 2009 their months. “I’ll be staggered if we don’t see at least some new entrants, be that in the shape of banks,
popularity increased from 60% in 2008 to 64% one new lender in this sector in 2010,” he says. investment banks or other financial institutions.
in 2009. The home reversion market share fell “This is the year of opportunity for the provider. “What is difficult in this market though is
again achieving just a 3% share. Whilst some House prices have bottomed out and the time to distribution. Brands in the equity release market
providers exited the market during the past year lend in the market is now. Those that are still do not sell, value on the other hand does.”
there still remains a wide range of product types
available.
Dean Mirfin, Key Retirement Solutions’ group
director, comments: “2009 has been a challenging
year for all sectors of our industry. The equity
release sector has not been immune to the effects
of the current economic climate as is evident
from the results for the year. The main measure
for the result is the number of new plans and
whilst a 17% fall is considerable the positive to
take from the result is the fact that this level was
maintained throughout the year, and that
demand continues to be strong as we enter the
first quarter of the new year.
“The uses of equity release continue to be
widespread, however the considerable increase in
the use of funds to repay debt is one of the
greatest trend changes we have seen. The trend of
debt repayment mirrors the trend across all ages
in the UK of clearing debt and freeing up more
disposable income and no doubt we will see this
continue further still in 2010.
“Equity release is still providing a major boost
to many retirees who have been hard hit by
falling annuity rates and miniscule levels of
return on their savings. As property values
continue to increase, albeit slowly, this will
further add to the attractiveness of releasing the
wealth tied up in our homes to better our
standard of living.”
February 2010 Mortgage Introducer www.mortgageintroducer.com
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