You are here: Home - News -

LV in ‘advanced’ investor talks for equity release after sales fall 42%

by:
  • 28/07/2015
  • 0
LV in ‘advanced’ investor talks for equity release after sales fall 42%
LV is in talks with potential investors to secure new lines of funding for its equity release range which saw a 42% decline in sales in the first six months of the year due to a decline in its annuity business.

Equity release sales fell from £57m in H1 2014 to £33m in the six months to June 2015, figures from its trading statement revealed.

The income derived from LV’s annuity business is used to fund its equity release mortgages.

Following the pension reforms introduced in April giving retirees the freedom to withdraw their pension savings as a lump sum, annuity providers saw sales of the product plummet. LV’s annuity sales fell by 37% from £232m in the six months ended 30 June 2014 to £146m for the same period this year.

Richard Rowney, managing director of LV life and pensions, confirmed that LV was now looking outside of its traditional source of funding which it hoped to secure this year.

“The demand is there for the product,” said Rowney. “Strategically we are working really hard to find alternative sources of funding that will help us satisfy that demand going forward. And on that we are pretty close in a number of advanced talks with different parties to hopefully be able to secure that in the second half of the year. If that does happen you would expect us to be able to write a lot more business. There is certainly the demand there to do it.”

Rowney would not disclose its equity release sales target for the next half of the year but said it was ‘absolutely’ of strategic importance to the business.

The talks have involved educating investors on equity release to help them become familiar with the product and to work out how it will be treated under Solvency II for capital purposes. Rowney said he was confident that once these short-term challenges were overcome people would start to see it as a great investment.

LV’s protection sales grew by 50% from £96m to £144m for the period with all product areas in this category performing well. The provider said the growth in sales was a combination of broker support in the sales process, a strong product suite and improved distribution in the form of new partnerships.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Kris Brewster from Skipton
Skipton offers mainstream loans to new-build borrowers up to 80% LTV

Skipton Building Society has launched a revised new-build product range after feedback from brokers, which includes standard loans for new-build...

Close