Equity release sales increase 5%

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The number of homeowners opting for equity release rose by 5% during the second quarter of 2009, compared with the previous three months.

However, on an annual basis volumes were down 22% at 5,328.

Safe Home Income Plans (SHIP) the body that represents the UK’s equity release providers, has also reported a 14% increase in the sale of drawdown plans, which have been proving popular since house prices began their decline.

Drawdown equity release plans now account for 51% of the market and are partly responsible for a fall in the amount of money released because borrowers can take a more staged approach to cashing in on the value of their homes.

During the three months to the end of June, the value of equity release plans sold fell to A?232.9 million, compared with A?245.01 million in the previous quarter.

The decline took the average amount released down to A?43,712, compared with A?48,287 in the first quarter of the year.

SHIP’s director general, Andrea Rozario, comments: a�?While the equity release market is still suffering along with the mainstream mortgage market, it is encouraging to see … evidence of some positive movement.”

He adds: “The quarter on quarter increase in the number of plans shows that consumers are once more starting to believe in the UK housing market.a�?

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