Equity release lending falls 9% in 2008

Safe Home Income Plans (SHIP), the equity release industry body, has published its full year figures for 2008, revealing a 9% year-on-year decline in the value of lending.

The total value of new business written reached £1.095bn, down from £1.210bn in 2007. There was also a 4% fall in the number of plans sold, from 29,293 to 28,224.

SHIP argued the figures demonstrate the strength of the sector, and in particular lifetime mortgages, as the decline is much smaller than the 30% fall in overall mortgage lending.

The role of intermediaries in the distribution of equity release remains unchanged, according to the results, with 63% of sales coming through advisers – the same proportion as in 2007.

Andrea Rozario, director general of SHIP, said: “Flexible drawdown schemes continue to prove popular as older consumers seek to find ways in which to fund their retirement against a backdrop of falling savings rates and the rising cost of living. The sales of drawdown plans was in fact the only product area to increase on last year’s figures, an upturn of 13% on 2007.

“This year will understandably continue to offer further challenges to the industry as a whole, and it is SHIP’s intention to continue its campaign to increase confidence and understanding of the benefits of safe equity release among advisers and consumers over coming year.”