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Equity release market grows by 10 per cent

Tuesday, 18 October 2011 11:35 AM

The number of home owners signing equity release deals rose ten per cent in the third quarter of the year as consumers became more aware of the potential for releasing money tied up in their property.

Safe Home Income Plans (SHIP), the trade body for equity release providers, said 4,148 people signed up to a deal between July and September, up from 3,710 in the second quarter.

And SHIP members made new advances of £206.2 million in the second quarter, up 12 per cent on the £184.9 million in the previous three months.

Drawdown lifetime mortgages were the most popular type of product, accounting for 61 per cent of new business, followed by lump sum lifetime mortgages (36 per cent) and home reversion schemes (2 per cent).

The average amount of equity released by home owners was little changed at £49,703 but the figure was 6 per cent up on this time last year.

Andrea Rozario, director general of SHIP, said: "The UK population is ageing and with insufficient pension provision and the prospect of meeting significant care costs, we expect the demand for equity release products to increase significantly over the next few years."

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