First rise in equity release since pre crisis

Dean Mirfin, group director for KRS, said total funds released rose 5.4 per cent to £959.6m which is the first rise in four years.

He added plan sales continued the growth seen in 2010 with a rise of 1.6 per cent to 22,366 in 2011.

The results were outlined in an eight-page report, UK Equity Release Market Monitor 2011 Review.

Mr Mirfin, said: “The equity release market is firmly established on a growth trend again after several years when the story has been about stagnation at best and decline for some providers.”

The data found that across the country seven out of 12 regions saw growth in the total number of plans sold with Wales seeing a growth of 24 per cent and East Anglia with 15 per cent.

However, the North West saw a 8.25 per cent fall in sales.

Home and garden improvements remained the most popular use of equity release cash with 57 per cent, while 32 per cent used the money to clear debts and 30 per cent used the cash to fund holidays.

However, Mr Mirfin used the opportunity to raise concerns that not enough clients are using drawdown and want to see its share of the market increase.

The group’s sales stood at 74 per cent of drawdown compared with the market average of 55 per cent.

He added: “We believe there is still work to be down in the sector to ensure that consumers are taking on single advance equity release when they do not have a requirement for the funds all at once.

“Factfinds need to identify clearly when funds are required. Drawdown can save consumers many thousands of pounds on the overall cost of borrowing.”