Equity release up 11% at Just Retirement as retirees plug the pension gap

31 March 2009 / by Rachael Stiles

Just Retirement has revealed an increase in equity release business of almost 11 per cent for the second half of 2008, compared to the same period in 2007.

The equity release provider has announced its interim results for the last six months of 2008 up to December 31, which show that Just Retirement equity release mortgage advances during the last six months of 2008 totalled £81.8million.

This marks a 10.7 per cent year-on-year increase in total equity release lending, up from £73.9million for the same period in 2007.

Just Retirement's total assets under management were up 43 per cent year-on-year, despite the current turmoil in the economy, which, according to the Council of Mortgage Lenders, saw lending in the wider market fall 51 per cent by January 2009 compared to January 2008 figures.

"Just Retirement has faced the exceptionally challenging conditions of 2008 with two principle goals: profitability and capital strength," said Just Retirement CEO Mike Fuller, who believes the results show that the company has "been successful in both aims."

"We have been able to continue to grow our equity release business at highly favourable margins," he added. "We continue to enjoy a strong competitive position with a solid flow of business at attractive margins.

"Accordingly, we view the remainder of the year with increasing confidence."

Just Retirement's figures for last year are in accordance with results from Hodge Lifetime, which showed that the UK's entry into a recession has not dampened homeowners' interest in releasing equity from their property, but has actually increased it.

Hodge Lifetime's research, conducted in February, found that independent financial advisors expect equity release sales to continue to rise in 2009, as retirees seek alternative forms of income due to falling returns on their investments.

"In the current environment, with stretched personal savings and inadequate retirement income, it is perhaps unsurprising that people are looking to equity release in order to make the most of the money built up in their homes," explained Jon King, managing director of Hodge Lifetime said at the time.

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