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Tuesday 3rd February 2009
The Equity Release Market
Whilst the mainstream mortgage market has seen a dramatic decline in 2008 the equity release market wasn’t affected to the same extent. A recent report for 2008 shows a decrease in the equity release market, however, it was still holding stronger than other sectors in the mortgage industry.
The most popular uses of equity release, according to the report are home and/or garden improvements 60%, holidays 35%, and strikingly 33% are using some or all of the funds to help out family or friends at a time when they see this as being more beneficial (2007 - 22%).
The average age of people releasing equity from their homes has increased in the latter part of the year resulting in an overall average age of 69 compared to 68 for 2007.
Dean Mirfin, a specialist in the field of equity release says, “2008 has proven to be a tough year for all financial services sectors. The results for the equity release market show that demand is still strong despite a year of house price deflation and understandably issues of confidence amongst consumers.
“It comes as little surprise, in the current climate, that we have seen a considerable increase in the number of consumers who are giving some or all of the money away. This increase is the most significant we have ever seen. Lifetime Mortgage interest rates remain competitive and the choice for consumers is better than ever. The industry as a whole is healthily positioned to meet the needs of those approaching or in retirement.
“Throughout 2009 it is important that those considering equity release do not get caught out by reductions in their property values. Many should look to drawdown options to lock in a facility which then remains unaffected by fluctuations in property values. For this reason we would expect to see demand for drawdown plans increase further still throughout the coming year.”
Figures taken from Key Retirement Solutions Market Monitor 2008