Equity release sector shows “fair performance”, according to SHIP

Safe Home Income Plans (SHIP), the trade body for equity release providers, recently posted market data for the first quarter of 2011.

Total advances of £181.6 million were made to 3,838 customers by SHIP members during the quarter. Compared with the fourth quarter of 2010, this represented a 4% drop in advances made (Q4 2010: £188 million) and an 8% fall in customer numbers (Q4 2010: 4169).

However, the average amount released was £47,323, up 4% compared with the fourth quarter of 2010 (Q4 2010: £45,218), and the highest average amount since the fourth quarter of 2009.

Drawdown mortgages remained the most popular product, representing 60% of all advances (Q4 2010: 57%), the highest proportion since the fourth quarter of 2009. Second most popular are lump-sum mortgages representing 38% of advances.

Andrea Rozario, director general of SHIP, said: “Given conditions across the lending sector, this represents a fair performance by the equity release market. The sector continues to be affected by constraints on funding and a reduced number of providers active in the marketplace.

“However, we are optimistic about prospects for the coming year; the recent sixth annual SHIP members’ survey saw members predicting new entrants (60%) and market growth (67%) in 2011.”