Demand for equity release increased by 9 per cent in 2007, with the popularity of lifetime mortgages declining in favour of drawdown.
The total number of loans rose from 27,00 to 30,08, according to Key Retirement Solutions’ UK equity release monitor for 2007. It shows the amount of equity released leapt by 24 per cent to nearly £1.4bn compared with just over £1.1bn in 2006.
Drawdown accounted for 51 per cent of plans compared with 23 per cent in 2006 while lifetime mortgages fell from 69 to 43 per cent.
Home-reversion plans dropped slightly from 7 to 6 per cent of all policies, following the introduction of FSA regulation in April.
London and the South-east saw the biggest sums of equity released from homes last year at £218.5m and £343.9m respectively.
Northern Ireland saw the biggest leap in the number of people releasing equity from their homes, up by 208 per cent, while the value of plans taken out in the region rose by 305 per cent to £21.1m.
Business development manager Dean Mirfin says: “Despite the ever volatile landscape of the UK economy, demand for equity release continues to rise. The drawdown market will stabilise throughout 2008 and we can expect to see it holding a 50 to 60 per cent share of total plans sold. If we do enter a period of zero growth in property prices or even a downfall for some, reversion plans will become more appealing and we can expect to see a rise in take-up as consumer confidence grows.”