View more on these topics

Shrinking equity release market is due to provider exodus, says Aviva


An 8% drop in equity release business has been blamed on big providers exiting the market in the past few months.

The size of the equity release market fell 8% in Q1 2010 and now stands at £213.4m, compared with £231.7 in Q4 2009, latest figures from Safe Home Income Plans show.

The total number of equity release customers remained stable with a fall of just 3.5% quarter on quarter from 4,888 to 4,716.

Home reversion advances rose 10% on Q4 2009 to £4.4m. Drawdown mortgages remain the most popular form of equity release, claiming over half of the market share at 55%, with £116.4m in advances.

Overall, the value of the equity release market has fallen by 13% from £244.7m in Q1 2009.

Dominic Fraser-Smith, retirement manager at Aviva, says: “This slight fall in market size is due to providers dropping out of the market as opposed to a fall in demand for equity release products.

“We are committed to the market and have had a positive start to the year.”

He adds: “We also believe that the ageing population and ongoing shortfall in pension provision will lead to equity release becoming a mainstream retirement funding vehicle in future as demand for the product continues to rise.” He adds that the firm expects to see the market recover in 2010 and possibly new entrants in the sector.

Andrea Rozario, director-general of Safe Home Income Plans, says: “Despite the withdrawal of some big providers, the equity release sector remains robust. The bad weather at the start of the year also had some impact on Q1 results but reports from members now show a strong run rate.

“SHIP is confident that over the year the market will remain strong and it is even possible that new entrants will appear from the middle of the year onwards.”


Charity boss calls for home ownership exams for FTBs

Malcolm Hurlston, chairman of debt charity Consumer Credit Counselling Service, says mortgages for first-time buyers should be sold like driving licences and applicants should have to sit exams. In a speech at CCCS’ recent annual convention Hurlston called for the Financial Services Authority to issue certificates to anyone buying their first home. He told attendees […]


Five ways to make your employee focus group session a success

by Debra Corey, group reward director  You just planned and booked what you thought was the perfect vacation for you and your family. You call everyone together to share the great news and instead of receiving sounds of glee and delight, you receive groans and complaints.Your youngest says: “I hate beaches, didn’t you know that?” (You think to […]


News and expert analysis straight to your inbox

Sign up