Brokers take three quarters of equity release market
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Brokers accounted for 74% of all equity release plans sold between July and September, figures from Safe Home Income Plans reveal.
The broker share of the equity release market has climbed 10% since the three months to June, continuing the recent trend for brokers to account for the majority of equity release business.
SHIP says this trend has been accelerated as a number of direct providers such as Northern Rock have left the sector.
This in turn pushes up the proportion of equity release plans now available through brokers.
The total amount lent through equity release rose 1.2% to £236.2m in Q3, compared with £233.3m in the previous quarter.
The equity release market is down 22% against the same time last year when total lending was £303.3m.
The number of new equity release customers dropped by 2.5% quarter-on quarter from 5333 to 5198, and has dropped 35% on an annual basis.
Average amounts lent through equity release increased by 3.9% in Q3 to £45,434, compared with £43,746 for the previous three months.
But the average amount lent through equity release has gone by 19% on an annual basis, the equivalent of £7,245 in a year.
Andrea Rozario, director-general of SHIP, says:”The drop in the number of plans sold can be partly attributed to the funding issues that the industry is currently facing.
“While equity release providers are experiencing high levels of customer demand, a significant impact on the quarter’s business figures has been the lack of liquidity in the overall market which has restricted the lending activity of some providers and resulted in the withdrawal from the market of some others.”
Drawdown is now the most popular form of equity release accounting for 52.2% of the market.
Lump sum plans now make up 46.2% of the market while home reversions represent a market share of 1.6%.
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