Equity release market is robust, says Hodge Lifetime

Equity release lending has fallen just 12% since the credit crisis began compared with a 60% drop in mortgage lending, according to retirement solutions provider Hodge Lifetime.

The equity release provider claims the market had received a useful boost from independent financial advisors (IFAs), with more advisers seeking guidance themselves on equity release during the last six months. As a result, the withdrawal of several large providers and direct sale forces has had a limited impact on the sector.

The company’s research revealed that the number of customers introduced to equity release through an adviser rose to 35% at the end of the first quarter of the year compared with 21% during the first quarter of 2008.

According to Hodge Lifetime, many retired homeowners have chosen not to sell their homes as a result of lower house prices. Many have decided to release the equity in their homes rather than selling up. The number of people using equity release for debt consolidation also increased from 11% to 35% in 2009, while many other older homeowners have used equity release to help out younger family members.

Managing director at Hodge Lifetime, Jon King, said: “While the equity release market has witnessed a slight decline since 2008, it has been nowhere near as significant as the fall in gross mortgage lending during the same period.

“The importance of seeking independent financial advice for these products has really come to the fore and it is the strong presence of IFAs who now operate in this arena that should be praised for ensuring the resilience of the market over the past years and into the future.”