The size of the equity release market fell by 8% in Q1 of 2010 and now stands at £213.4m, compared with £231.7 in Q4 2009, show the latest figures from Safe Home Income Plans.
The total number of equity release customers remained fairly stable with a fall of just 3.5% quarter on quarter from 4888 to 4716
Home reversion advances rose by 10% on Q4 2009 to £4.4m. Drawdown mortgages remain the most popular form of equity release, claiming over half of the market share – 55% with £116.4m worth of advances.
Lumpsum mortgage sales were £92.6m in the quarter. The distribution of equity release continued to be dominated by intermediaries, who accounted for 79% of all sales.
Overall the value of the equity release market has fallen by 13% from £244.7m in Q1 2009 to £213.4m in Q1 2010.
The total number of customers year-on-year has fallen by just 7%. The percentage of sales through intermediaries has remained stable at the 79% mark.
Andrea Rozario, director general of SHIP, says: “These figures show that despite the withdrawal of some big providers from the market the equity release market remains robust. The bad weather at the beginning of the year has also obviously had some impact on the first quarter results with conditions making business difficult but reports from members now show a very strong run rate.
“SHIP is confident that over the course of the year the market will remain strong and it is even possible that new entrants will appear from the middle of the year onwards.
“We have had some excellent response to our benefits campaign but we really want as many IFAs as possible to take part. It is crucial that the next Government takes notice of all our concerns and makes steps to clarify the relationship between state benefits and equity release.”