Brokers rule equity release distribution

7 June 2010

Figures recently released by Safe Home Income Plans show a continuing trend of the equity release market contracting from its peak a couple of years ago.

But what’s heartening about the latest figures is the way this niche market has fared compared with mainstream mortgages.

In Q1 2010 the Council of Mortgage Lenders reported that mainstream mortgages had contracted 64.8% compared with Q1 2007.

On the other hand, the equity release sector experienced a contraction of just 27.4% in the same period.

The other factor hidden in the statistical blizzard is the way business is faring through direct and intermediary channels.

Of course, regular readers of my column will know of Hodge Lifetime’s commitment to IFA distribution.

Apart from the advantages to product providers of the intermediary route to market, the benefits to borrowers are also well documented.

Despite the overall market holding up pretty well, mortgage plans via the direct route have fallen 47% in 2010 compared with the previous year.

This means that intermediaries are now clearly the dominant force in equity release distribution, with 70% of new cases in Q1 coming through this channel.

If we wind back the clock to Q1 2006 the proportion was 44%. This is quite a turnaround and brokers should be duly proud.

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