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SHIP: Equity release holds up well despite crunch
30 April 2008 11:30
Demand for equity release has dipped but is still fairly strong despite the credit crunch and could soon rise again, according to new data from the industry's regulatory body.
Take-up of equity release plans fell in volume terms by 13 per cent year-on-year to 5,892 over the first quarter, figures from Safer Home Income Plans (SHIP) showed, as well as dipping by 17 per cent in terms of value to £242.7 million.
SHIP attributed these decreases to the impact the credit crunch had on consumer sentiment towards the end of 2007, but noted that providers and intermediaries have recorded an upswing in the numbers of enquiries they receive since the start of this year.
Its index also displayed the increasing dominance of the sector by flexible drawdown plans, which increased their market share to 55 per cent during this quarter, compared to 40 per cent for the same period of last year.
SHIP director general Andrea Rozario asserted that, with the population ageing, pension provision declining and so much wealth tied up in property, take-up of equity release is set for a spell of long-term growth, whatever occurs in the mainstream mortgage sector.
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