SHIP reveals first quarter results
SHIP, which represents 90 per cent of the UK equity release sector, revealed home reversions increased 41 per cent from quarter four 2005 figures, accounting for £18.9 million worth of new business. This was a 42 per cent increase on the equivalent quarter last year.
Drawdown has also demonstrated strong growth, accounting for almost 20 per cent of all new mortgage business compared to 8 per cent in quarter four.
The figures reflect the steady growth shown across the equity release sector. The total value of new business written has increased 11 per cent on last year to £279 million, contributing to an annual rolling year total of £1.131 billion for quarter one 2006.
Jon King, chairman of SHIP, said the increase in the figures was positive for the industry. “The continuing growth in home reversions is encouraging and the impressive increase in drawdown mortgages signals the growing interest in these new more flexible products.”
Dean Mirfin, business development director for Key Retirement Solutions, said: “The growth reflects that advisers are becoming more confident in acquiring business or referring to third parties. The results overall are very pleasing, but the big concern is still the high percentage of clients that go direct. If you look at lifetime mortgages sold through an intermediary, 35 per cent are drawdown. If a customer goes direct, drawdown accounts for just two per cent, so clients are paying considerably more. This anomaly in figures shows that with intermediaries, clients are being recommended a different product mix.”
He added: “I hope the growth in home reversions continues, so that it gains its rightful place in the market. With regulation next year, we’ll hopefully see more advisers looking seriously at reversions as an option.”