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Rock fall hits equity-release sales

Equity-release sales increased last year but the Northern Rock debacle hit business in the final quarter, says Safe Home Income Plans.

The total value of new business written last year was 1.21bn, which was 5 per cent up on 1.154bn in 2006.

Sales through intermediaries increased by 25 per cent last year from 14,799 to 18,531 while direct sales fell from 12,973 to 10,762.

However, the total value of business written in the final quarter of last year was down by 9 per cent on the previous year at 288.9m compared with 317.4m.

Ship says the fall was linked substantially to the situation surrounding Northern Rock, a major equityrelease player, and compares with a 12 per cent fall in gross lending by all mortgage lenders between the third and fourth quarters.

The trade body says drawdown schemes and home reversions sold strongly last year. Sales of drawdown schemes almost doubled from 6,982 to 13,736 while reversions were up by 6 per cent from 1,440 to 1,529.

Director general Andrea Rozario says: “The equity-release sector is extremely well placed to develop strongly.”

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