The total value of equity release lending fell by nine per cent in 2008, new figures from SHIP (Safe Home Income Plans) have revealed.
The decrease is much smaller than the decline in regular mortgage
lending, however, which according to the Council of Mortgage Lenders (CML), was 30 per cent over the same period.
According to SHIP, the nine per cent decrease in value, and four per cent fall in the number of plans sold, shows that the equity release
market is holding up well.
The total value of new equity release business for 2008 was almost £1.096billion. Commenting on the figures, Andrea Rozario, director general of SHIP said:
"A slight decline in business volumes in 2008 was to be expected given the turbulence in the economy over the past 12 months. Overall we are pleased with how the sector has held up, especially in comparison to mainstream mortgages."
The equity release products that suffered the most were home reversion schemes
, with the number of policies down by 30 per cent compared to a fall of just two per cent in the number of lifetime mortgages
taken out.Drawdown equity release
products accounted for 55 per cent of all equity release products sold during 2008, demonstrating their sustained popularity.
"Flexible drawdown schemes continue to prove popular as older consumers seek to find ways in which to fund their retirement against a backdrop of falling savings rates and the rising cost of living." Ms Rozario added.
The sale of drawdown plans was the only product area to increase on last year's figures, seeing an upturn of 13 per cent compared to 2007.
Speaking of the future for equity release, Ms Rozario concluded: "2009 will understandably continue to offer further challenges to the industry as a whole, and it is SHIP's intention to continue its campaign to increase confidence and understanding of the benefits of safe equity release amongst both IFAs and consumers over the coming year."Get equity release quotes and advice today
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