Demand for equity release plans fell 16.5% in Q1 this year compared with the previous quarter, Key Retirement Solutions reveals.
The firm’s Equity release market monitor shows that although demand fell, more than £290m was released from UK homes in Q1. KRS says the average amount released by clients increased from £48,000 to £53,000.
Dean Mirfin, business development director at KRS, says: “Unlike the mainstream mortgage market we’ve not seen rate hikes or providers being unable to lend. Lenders are committed to the sector.”
Duncan Young, managing director of Retirement Plus, says the equity release market took a nosedive in Q1 due to the wider market problems in Q4 2007.
Young says: “Everybody knew this was going to happen but what needs to be considered is that it takes three to four months for equity release transactions to complete.”
He says Retirement Plus saw more than a 50% rise in cases and revenue in Q1 2008 compared with Q1 last year.
The KRS report shows demand for drawdown plans grew by 29% year-on-year, accounting for 62% of plans taken out in Q1. By contrast, demand for lifetime mortgages declined from 54% to 33%.