Equity release advances up 15% year-on-year

Equity release advances totalled £215.9m in Q4 2011, the highest level since 2009, according to figures from Safe Home Income Plans.

This represents a 15% increase on the £188.5m advanced in Q4 2010.

In addition, the number of plans sold rose to the highest level since the beginning of 2010 in Q4 2011 at 4,399.

This is an increase of 6% on the previous quarter’s 4,148 plans.

However, the value of plans sold in 2011 overall was slightly lower than in 2010, at £788.6m compared to £803.6m. SHIP puts this down to there being fewer providers in 2011 due to market consolidation.

Drawdown products accounted for 62% of the market in Q4 2011, while lump-sum mortgages accounted for 36% and reversions 2%.

Intermediaries sold 90% of all equity release plans by volume in the final quarter of 2011, compared to direct sales of 10%, which is the highest proportion brokers have accounted for since SHIP started tracking the data in 2003.

Andrea Rozario, director-general of SHIP, says: “We are delighted to report that not only did total advances reach a two-year high in Q4 2011 but this is the third quarter of growth in equity release sales. This is excellent news and puts the industry on track for a strong 2012.”

She adds that SHIP will be announcing an outline for its new offering in the coming months, as it is expanding its membership to include intermediaries and solicitors this year.