Safe Home Income Plans, the UK equity release industry body, has today released its Q3 figures that show a significant increase in home reversions business written.
SHIP, which represents over 90% of the equity release sector, says the fact that property price inflation is far lower now than in recent years is making reversion product more attractive.
The total value of new business written was 293.6m, 12.5% ahead of Q2 in 2005 (260.9m). Home reversions business increased significantly from 10.6m in Q2 2005 to 17.3m in the latest figures.
Year on year home reversions have leapt from 9.6m in Q3 2004 – a rise of 80%. Meanwhile, despite an increase on Q2 2005 business from 250.3m, year on year figures show a considerable drop in the value of lifetime mortgages business written from 328.8m in Q3 2004 to 276.3m.
Jon King, chairman of SHIP, says: “After eight years of seemingly unstoppable growth lifetime mortgages business has begun to slip back, despite it being a record quarter in 2005. However, home reversions have performed strongly this quarter.
“This reflects continued uncertainty in the property market and speculation that house price inflation is not likely to be as great in the future as it has been in the past. This may see increasing numbers of consumers turning to home reversions in preference to lifetime mortgages as the proportion of the house sold is fixed.”