KRS sees ER demand fall 16%

13 October 2008

The firm’s UK Equity Release Market Monitor says that Q3 2008 shows a lower decrease of 10% in plan numbers when compared to the Q3 2007, showing that in real terms the market is holding and still improving from its position at the start of this year.

The Market Monitor, which tracks activity in the UK equity release market, has found that the total amount of equity released by retirees in Q3 2008 reached £340m - a 7.5% decrease on the same period in 2007.

Although fewer plans are being taken out, the average amount released by retirees has increased by 5% to £52,298 in the third quarter of 2008.

On the other hand, KRS’ Q3 results show an increase both in the number of plans and value released compared to the same period of 2007.

The number of plans has increased by 6.8%, and the value of lending has increased by 13%.

This shows that KRS has increased its share of the amount of equity released by UK homeowners from below 20% at the start of 2008 to 22% in Q3 2008.

This increase also means that Key now account for over a third of equity released which is generated through intermediaries in the UK.

Dean Mirfin, business development director at KRS, says: “Naturally 2008 is proving to be a challenge for all sectors of the financial services industry. The figures represented in the report, I believe do shed a positive light on the equity release sector as a whole.

“The third quarter of this year has shown that demand for equity release is still high. It is important to note that new business levels have increased quarter on quarter throughout 2008. The market is proving that there is a strong demand for equity release and that there are plenty of lenders who are able to lend, and at competitive rates. At the time of publication the lowest fixed rate for life available is 5.92% monthly, which equates to 6.08 annualised.”