Equity release sees 'modest' growth

06 February 2006
Equity release saw modest growth in the last three months of 2005, according to new figures.

A report published by the Council of Mortgage Lenders (CML) saw equity release lending rise by three per cent in the final quarter of last year.

During this period, lending was worth £282 million, compared to the £273 million in the previous quarter.

The second half of the year typically brings a stronger market and last year was no exception, as equity release lending was 13 per cent higher than during the first half – at £556 million.

However, this was 20 per cent lower than it had been in the last six months of 2004.

The equity release market is continuing its growth – rising overall by 33 per cent in 2005. Outstanding mortgages were worth more than £5.3 billion.

"Equity release is continuing to develop but reflects the cautious approach being taken by lenders and borrowers," said Michael Coogan, director general of the CML.

"Confidence will grow if all those selling equity release use the guidance that is available to be certain that they have fulfilled all their requirements.

"Looking ahead, people aged over 65 have more than £1,000 billion in unmortgaged wealth in their homes, so there is significant potential for equity release to fulfil the needs of older people in the longer term."

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