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Monday 27th of July 2009
July 21, 2008

Equity release approvals rise 14%


by Gill Montia
Equity release approvals rise 14%

Safe Home Income Plans (SHIP), the body that fosters good practice in the UK’s equity release market, has reported a rise in demand for such loans during the second quarter of this year.

According to SHIP, homeowners availed themselves of £257.7 million in the three months to the end of June, representing a 14% rise on the amount withdrawn during the pervious three months.

Seventy-one per cent of loans approved during the period were submitted via intermediaries, down from 74% in the first quarter.

SHIP’s director general, Andrew Rozario, comments that the figures underline the health of the UK equity release sector when compared to the mainstream mortgage market.

He adds that they also highlight the forces that drive the equity release market relative to the mainstream market, mentioning an ageing population, falling levels of pensions contributions and the high levels of personal wealth held in housing equity.

Earlier this year, the Council of Mortgage Lenders (CML) issued a report on the UK equity release market, which examined why the market in the UK has grown at a much slower rate than in countries such as the USA, Australia and New Zealand.

The research found that growth in markets overseas could be attributed to Government guarantees and social considerations.

For example, in Australasia younger households are more comfortable drawing on their housing assets and less concerned about inheritance than their UK counterparts.

The CML has been calling on the industry to come up with new and creative ideas and for the Government to engender consumer confidence in the market.

Meanwhile, the Ifs School of Finance, the UK’s awarding body for the financial services sector, has reported increased demand for its Certificate in Regulated Equity Release (CeRER) during the past three months.

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