Equity-release lending fell by 13 per cent in the first quarter of this year to £213.4m from £244.7m in the same period in 2009, according to figures from Ship.
Safe Home Income Plans says the total number of customers fell by 7 per cent year on year while the percentage of sales through intermediaries remained stable at 79 per cent. Total market advances fell by 8 per cent to £213.4m from £231.7m. The total number of customers fell by 3.5 per cent to 4,716 from 4,888 from the final quarter of 2009.
Drawdown mortgages remain the most popular form of equity release, with 55 per cent of the market share and £116.4m worth of advances. Home-reversion advances rose by 10 per cent to £4.4m while lump-sum loans fell by 9 per cent to £92.6m. Ship director general Andrea Rozario says: “Ship is confident that over the course of the year the market will remain strong and it is even possible that new entrants will appear from the middle of the year onwards.”
Independent Equity Release Adviser Alliance spokesman and IFA Dermot Brannigan says: “The effect of fewer providers has probably knocked the market’s confidence.” Money Marketing last week revealed that Partnership plans to return to equity-release lending after withdrawing from the sector in 2009. A long line of lenders has left the market, including Stonehaven and Prudential.