Equity release market declines 22% in value

UK equity release industry body SHIP has published latest figures for the third quarter of 2009.
There was a 1.2% increase in market value (the total amount taken via equity release plans) in this quarter from £233.3 million (Q2 2009) to £236.2 million (Q3 2009). The number of new equity release customers (market volume) dropped by 2.5% quarter on quarter from 5333 to 5198. However, this is an increase of 2% on Q1 2009 results (5074).
This quarter showed a 3.9% increase in the average amount released through equity release, rising from £43,746 (Q2 2009) to £45,434 (Q3 2009).
In comparison to the wider remortgage market, which has seen a decline of 63%, this year has seen a 22% decrease in the value of the equity release market from £303.3 million (Q3 2008) to £236.2 million (Q3 2009).
However, as the number of customers has fallen by 35%, the average amount released per customer has increased by 19% from £38,189 to £45,434.
74% of all equity release plans were sold through intermediaries, compared with 26% direct sales. This is a 10% increase on Q2 2009 and in line with the pattern for increased sales through intermediaries that was established in 2007 and 2008. This trend has been accelerated by the reduced number of direct providers and therefore the increased percentage of equity release plans now available through intermediaries.
Drawdown is now the most popular form of equity release, with 52.2% of the market. This is a rise of 4.6% on Q2 2009. Lump sum plans now make up 46.2% of the market. This leaves home reversions to make up the remaining market share of 1.6%.
Andrea Rozario, director general of SHIP, said: “This has been a challenging quarter in a difficult year. However