Money Marketing revealed yesterday that Prudential plans to stop offering lifetime mortgages in the first quarter of next year as it believes the upfront capital required to write new business would be better used in other product areas.
Prudential is the latest in a long line of equity release providers to pull out of the market, leaving Aviva, Just Retirement, and LV= as the only substantial players still writing new business in the sector.
The move follows Northern Rock, Saffron Building Society, Coventry Building Society and Retirement Plus who have all suspended new lending over recent months or closed to equity release business completely, while In Retirement Services went into administration earlier in the year.
But Just Retirement says it has no plans to follow suit.
In a statement it says: “While we acknowledge its reasons for exiting, Just Retirement can categorically state that they have no bearing on our position or strategy within equity release.
“Just Retirement remains fully committed to this market for both its profitability and long term growth characteristics.”
LV= head of equity release Vanessa Owen says: “We’re a little surprised at the Prudential’s move and believe it could turn out to be a missed opportunity for them. We see this market as a growth area and LV= is still committed to offering equity release, as part of a range of flexible retirement solutions propositions.”
Aviva director of annuity business and equity release Clive Bolton adds: “While Prudential may have decided to leave the equity release market, Aviva is fully committed to growing its share of
Home & Capital managing director Simon Little says: “Home & Capital confidently expects to be part of this market for many years to come and play a full part in the opportunities that it will offer. In the meantime we are expecting a number of new providers to join the market, which is now ripe with opportunity.”
Stonehaven and Hodge have also confirmed their commitment to the sector.
Hodge managing director Jon King says: “We were in the market a long time before Prudential and we will be there for a long time after.”
Stonehaven Equity Release chief executive Jayne Almond says: “We are disappointed that Prudential is pulling out, but that is for very specific reasons. We are backed by a major bank and which enables us to fund new lending.”