The trade body said that a lack of funding meant more providers would exit the market. The warning comes after Newcastle Building Society confirmed it would withdraw its equity release proposition, due to the recent economic turbulence (see p.1).

Andrea Rozario, director general of SHIP, said funders of equity release continued to
believe the sector was risky, which meant the supply of plans would not match increasing demand.

She added: “Customers need different products to suit their needs, but products will not be adapted or even available if providers exit the market. We are working to ensure that funders understand that equity release can be profitable for them, so it is hoped that the market will pick up in 2010.”

Stuart Wilson, managing partner of Equity Advice, said it believed a few providers would
exit the market over the next six months.

He said: “We are going through a tough time. Funders continue to be worried about not seeing a return on the capital put into equity release.”

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