Mortgage News
Equity release sales rise by over a fifth
Equity release sales jumped 22% in the first half of 2010 to £454.99m, as pressure increased on pensioner incomes and confidence in house prices was boosted, according to Key Retirement Solutions (KRS).
KRS’ survey showed that over the same period in 2009, equity release sales amounted to £372.394m.
The average age of people starting equity release also increased to 69 for the first half of this year from 67 during H1 last year, which KRS said reflected the need for retired homeowners to increase their income as they struggle on their existing pensions.
In addition, growing confidence and increased levels of activity in the equity release market has encouraged more lenders to consider the sector, with More2Life re-entering the market in Q2 this year and launched the first new product for two years. This was a lifetime mortgage offering enhanced deals to people with health conditions.
Total sales of equity release plans climbed 5% to an estimated 10,318 in H1 2010 up from 9852 in 2009.
Drawdown plans, which enable customers to take cash as required rather than in a lump sum, made up 72% of sales compared with 61% last year. The average amount of cash released in H1 2010 was £42,555 compared to £42,586 in the same period of 2009.
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Dean Mirfin, group director at KRS, said: “Housing wealth is an important source of income for pensioners and certain to become even more important as pension income continues to be squeezed.
“New business growth rates demonstrate that customers are recognising their housing wealth can be put to good use.”
He added that the strong sales performance and firms re-entering the market showed the sector was moving in a positive direction, with new products highlighting that there is room for innovation.