Brokers sold three-quarters of all equity release plans in Q3
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Brokers accounted for almost three quarters of all equity release plans sold between July and September, figures from Safe Home In come Plans reveal.
Brokers sold some 74% of all equity release plans in Q3 2009, a rise of 10% on the previous quarter. SHIP says this trend has accelerated as a number of direct providers such as Northern Rock have left the sector.
This has pushed up the proportion of equity release plans that are available via brokers. The total amount lent through equity release rose 1.2% to £236.2m in Q3, compared with £233.3m in Q2. The equity release market is down 22% compared with Q3 last year, when lending totalled £303.3m.
The number of new customers dropped by 2.5% in Q3 from 5,333 to 5,198, a 35% fall on an annual basis.
Andrea Rozario, director-general of SHIP, says equity release providers are still experiencing high levels of customer demand.
But she adds: “A significant factor in this quarter’s business figures is the lack of liquidity in the market which has restricted the lending activity of some providers and resulted in the withdrawal of others.”
Equity release funds are increasingly being used to pay off debt, according to research from Key Retirement Solutions.
Some 36% of its customers used equity release to pay off debts including loans and credit cards during Q3 compared with 29% in Q2.
The proportion of customers using equity release to pay off their mortgages between July and September rose from 15% to 23%.
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