Equity release lending rose to £217m in Q1 2012
Equity release adviser claims lending would top £300m if the £83.8m of untapped drawdown funds, yet to be released, are added in.
Total equity release lending rose to £217.1m in the first three months of 2012, data from Key Retirement Solutions suggests.
Plan sales rose 6.4 per cent to 4,508 in the three months compared with 4,237 for the same period last year while growth in total lending was 1.7 per cent up from £213.48m in the first quarter of 2011.
Growth in plan sales was nearly four times faster than growth in total lending underlying how increasing use of drawdown is driving growth across the equity release market. Key Retirement’s figures show £83.8m of drawdown funds was not used in the quarter.
Drawdown sales made up 66 per cent of total sales in the first quarter compared with 55 per cent for the whole of 2011, enhanced drawdown and single advance enhanced sales also made up 10 per cent of the market.
Dean Mirfin, group director at Key Retirement Solutions, said “As the return to recession hits home to those on fixed incomes it comes as no surprise that in the first quarter of this year we have seen a further increase in the levels of equity being released, importantly the increase in the levels of drawdown are significant allowing greater flexibility for borrowers.
“The levels of enhanced equity release, now accounting for a 10 per cent market share, are also growing in significance.
“Helping out family members still accounts for almost 1 in 4 of all plans taken out during the period showing that equity release is helping across generations during these testy financial times.”
Home and garden improvements remained the most popular use of equity release cash – 57 per cent of customers used some or all of the cash for that with 33 per cent using money to clear debts and 31 per cent to help fund holidays.