While this is not terrific news, anecdotal ev-idence points to the fact that the reduction in business had its roots in lower than expected enquiries in the early part of last year and also towards its end.
On the other hand, average loan amounts are up compared with last year.
The average equity release loan in Q1 2007 was £47,864 while the figure for the same period this year is £52,084.
At least this increase in value has contributed towards maintaining brokers’ income levels, go-ing some way towards offsetting the fall in the number of plans sold.
The South-East remains the strongest region in the UK with regard to equity release, with 1,200 new plans arranged during Q1 2008.
London consistently sees the highest average loan am-ounts in the country and these figures show this still to be the case, with loan values rising. In Q1 2008, the average loan in the capital was £89,530 compared with £71,837 in the same period in 2007.
Analysing how home owners are using equity release can be useful when considering how we generate enquiries, and the table on the right shows the top five uses for equity release in the first three months of this year.
But the most dramatic change is in the mix of product sales. Drawdown has seen a leap in popularity from a 40% share of new plans sold during Q1 2007 to 62% for the same period this year.
Drawdown’s gain has been at the expense of single release plans, which now account for 33% of the market. Meanwhile, home reversions show no year-on-year change, remaining at 5% of the market.
While new business figures overall were down, reports from brokers and providers point towards a reasonable recovery as the quarter progressed.
We hope to see this reflected in the figures for Q2 2008.
Full details of the report can be found at www.keyrs.co.uk/q1marketreport