Equity release market performing well, says SHIP

Safe Home Income Plans (SHIP), the equity release provider trade body, has posted positive equity release market figures for the first quarter of 2010. New data suggests that while the market is suffering some effects from the loss of providers, demand is strong and activity remains buoyant.

Home reversion advances rose by 10% compared with the previous quarter to £4.4 million. Drawdown mortgages remain the most popular form of equity release, claiming over half of the market share (55%) with £116.4 million worth of advances. According to SHIP, lump-sum mortgage sales totalled £92.6 million and the distribution of equity release continued to be dominated by intermediaries, who accounted for 79% of all sales.

The size of the equity release market remained fairly stable during the first quarter with total market advances falling just 8% compared with the fourth quarter of 2009 (£213.4 million compared with £231.7 million in the fourth quarter of 2009). However,
the total number of customers has also remained fairly stable with a fall of just 3.5% quarter-on-quarter from 4,888 to 4,716.

Overall, the value of the equity release market fell 13% from £244.7 million during the first quarter of 2009 to £213.4 million during the first quarter of 2010.

Andrea Rozario, director general of SHIP said: “These figures show that despite the withdrawal of some big providers from the market the equity release market remains robust. The bad weather at the beginning of the year has also obviously had some impact on the first quarter results with conditions making business difficult but reports from members now show a very strong run rate.

“SHIP is confident that over the course of the year the market will remain strong and it is even possible that new entrants will appear from the middle of the year onwards.
“We have had some excellent response to our benefits campaign but we really want as many IFAs as possible to take part. It is crucial that the next government takes notice of all our concerns and makes steps to clarify the relationship between state benefits and equity release.”