The equity-release market has been dealt a blow after one of the leading providers, GE Life, pulled out of the home-reversion sector.
The insurer cites low sales for its decision but has pledged to look after existing customers following its exit. It will now look to focus on the lifetime mortgage market.
Safe Home Income Plans revealed last month that 73.5m home-reversion business was written by members in 2006, representing 6.4 per cent of Ship’s equity-release business, although this figure was up by almost 35 per cent from 2005.
Market sources have indicated that other providers may be set to follow GE Life out of the sector due to the low volume of sales of the product.
Mortgage Express has ruled out entering the home-reversion market, which will become regulated in April, for these reasons.
GE Life equity-release product and marketing manager Simon Little says: “We have taken the decision to withdraw from offering new home-reversion policies and focus our energy on the lifetime mortgage market. GE Life considered the low sales of the home-reversion market in general as part of its decision.
“Focusing our attention more on the lifetime mortgage market will enable us to become more competitive and explore new product developments.”