In the previous quarter of 2010, equity release values amounted to £196.7m.
SHIP figures showed that the average amount released also rose by more than £1000, from £45,702 in Q2 to £46,754 in Q3 2010.
Andrea Rozario, director general of SHIP, said: “The equity release market has returned to growth with the largest quarter on quarter increase since mid-2008. The financial services industry has had a tough couple of years and this move clearly illustrates increased customer demand. It also shows that the work undertaken by SHIP and its members to increase the wider acceptance of this product range is having an impact.”
Intermediary distribution remains strong in the sector, with brokers selling 82% of all equity release products, up 1% on Q2 2010.
In addition, drawdown mortgage products have continued to dominate the market, accounting for 57% of sales in the equity release market, a slight rise on 56% in the second quarter.
Sales of lump sum products fell slightly during the third quarter to 41% of the market from 42% in Q2. This is a significant change from two years ago when lump sum sales made up 56% of the value of sales.
SHIP said this could be partly down to consumers’ reluctance to take out substantial one-off amounts of housing equity while the future of the housing market remains so uncertain.
Rozario said: “It is interesting to note the swing from lump sum mortgages being the most popular product to drawdown dominating the market. This reflects the change in the type and number of providers as well as consumers attitudes to borrowing.
“With the current economic turmoil and resulting consumer uncertainty, many consumers favour drawdown mortgages which allow them to gradually access the equity in their homes. The sales of reversion mortgages have also increased.”
She added: “This quarter’s figures provide us with a strong platform for growth in the remainder of 2010 and a firm foundation on which to expand the market in 2011.
“In addition, the cuts announced in the recent Spending Review will hit all sectors of the population and may lead to more people seriously considering equity release.”
