Equity release figures from retirement funding solutions provider Just Retirement, show that a recent rise in approvals has helped the company to boost its annual sales.
In the fourth quarter of the year ending June 30 2009, equity release sales saw a year-on-year decline of nine per cent, reflecting current market trends, but compared the third quarter, sales were up by 17 per cent.
This significant quarterly rise helped annual Just Retirement equity release sales to increase marginally by 2.5 per cent on the previous year.
Total sales reached £234.9million in quarter four, 20 per cent higher than the previous record, and took a bigger market share than in the previous 12 months, representing 19 per cent of all equity release plans taken out, up from 14 per cent.
Annuity levels at Just Retirement have also helped to boost profits, with sales rising 18 per cent higher than its previous record level.
"It is very pleasing to report such a strong fourth quarter performance from the group," said Mike Fuller, chief executive of Just Retirement, commenting on the figures.
According to Mr Fuller, the performance is "validation" for the firm's profit-focused strategy, of concentrating on maximising shareholder returns rather than keeping up with its competitors' "irrational rates".
Mr Fuller explains that the year-on-year decline in equity release sales is "against a relatively difficult current background, impacted by valuation issues in the wider housing market and a strong comparative quarter." He adds that the sharp quarterly rise, considering the circumstances, "is a very creditable result."
"Current trading remains strong," he continued, "and, notwithstanding that the summer months are typically a slower period for sales," he expects to see growth in total sales for the current quarter compared to the corresponding quarter last year.
Many retired homeowners are turning to equity release as a result of falling interest rates which have hit incomes from their savings, and the turbulence in the stock market which have effected retirns on their investments.
"Quote and application activity in annuities remains encouraging, reflecting the improved competitive landscape. Lead indicators for equity release are resilient despite the wariness of homeowners in the current uncertain housing market," Mr Fuller added.
Along with other providers in the equity release sector, Just Retirement stands to benefit from the announcement this week that rival provider In Retirement has gone into administration.
© Fair Investment Company Ltd
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