The equity release market is resilient, despite 2009 figures being down on the previous year, according to Key Retirement Solutions (KRS).
Its 2009 Equity Release Market Monitor reports that new plan numbers were down 17% at 21,305 compared to 25,790 for 2008. However, KRS notes that at the half way point the number of new plans was 17% down compared to the same period of 2008, which it argues shows that the result overall has remained consistent rather than the gap widening.
New lending figures were £1.02 billion, 14% down on 2008 (£1.19 billion). KRS says this reduction is relatively in line with plan numbers but also is as a result of lower average property values and increased take-up of drawdown plans. This option allows clients to draw down the funds in stages, as and when required, which can heavily reduce the overall cost.
The Market Monitor also reveals the usage trends for the money released. The most dramatic change year on year comes in relation to those using the money to repay non-mortgage debt. This has increased to 35% of customers from 11% in 2008 helping many retirees free up much needed income.
Dean Mirfin , Key Retirement Solutions’ group director, said: “2009 has been a challenging year for all sectors of our industry. The equity release sector has not been immune to the effects of the current economic climate as is evident from the results for the year. The main measure for the result is the number of new plans and whilst a 17% fall is considerable the positive to take from the result is the fact that this level was maintained throughout the year
