SHIP remains optimistic about equity release sector

Equity release trade body Safe Home Income Plans (SHIP) recently announced new equity release market figures for the second quarter of 2010. Data taken from its members indicate that current providers are taking over the market share abandoned by players who have left the industry over the last twelve months, suggesting growth within the sector may resume this year.

The value of the equity release market remained fairly stable during the second quarter. Total market advances fell by 8% to £196.7 million compared with £213.4 million during the first quarter. While the size of the market fell, the average sum advanced increased from £45,251 in the first quarter to £45,702 in the second.

Direct sales of equity release fell 29% from over 1,200 to 860, while intermediary sales fell by just under 2%. These figures show the impact of the withdrawal of a substantial player from the market. Intermediary sales now account for 81% of the market, up 8% compared with the second quarter of 2009. Drawdown remained the most popular form of equity release during the second quarter, claiming 56% of market share with £110.7 million worth of advances.

Andrea Rozario, director general of SHIP, said: “Data from members for the second quarter of 2010 clearly shows that the decline in the market, which started in the final quarter of 2008, has reached its nadir. There are signs that a number of important initiatives, spearheaded by SHIP and its members, are working to grow the market.”

She added: “I am pleased to see that the tide of withdrawals from the market may finally be turning with the re-entry of a former provider, More2Life, in recent months. Finally, it is clear that current providers are absorbing the demand which was previously supplied by those exiting the market in the last 12 months. I look forward to seeing reports of strong growth from members over the coming months.”