Bringing you live news and features since 2006 

Drawdown effect drives equity release growth


More than GBP219 million of housing wealth was released in the first quarter as the drawdown effect continued to boost equity release plan sales, analysis from leading independent equity release adviser Key Retirement Solutions says.

Sales of plans rose 3.7% in the first three months of 2011 to 5,812 compared with the same period of 2010 confirming the recovery in the market after three years of decline.
Key Retirement Solutions Equity Release Market Monitor shows the total value of equity release rose from GBP216.9 million in the first quarter of 2010 to GBP219.85 million in the first three months of 2011.
The growing use of drawdown, which accounted for three-quarters of all sales, was the main driver in market recovery with a further boost from the use of enhanced equity release aimed at customers with medical or lifestyle issues.
More 2 Life, which pioneered enhanced equity release when it became the first new lender in the market for three years in 2010, has firmly established itself as a major provider having gradually built its market share to over 10% in quarter 1.
But it is the ongoing rise of drawdown which is driving the revival as demonstrated by the fall in the average amount released by customers to GBP37,089 in the first three months of 2011 compared with GBP43,090 in the same period of 2010.
Drawdown – which accounted for 75% of sales in the first quarter compared with 68% in 2010 – benefits customers who cut borrowing costs as they can draw funds when required rather than in one lump sum.
Dean Mirfin (pictured), Group Director at Key Retirement Solutions (, says: “The market recovery is on course after three years of decline with enhanced equity release making an important contribution.
“That clearly demonstrates the need for innovation and flexibility and shows that customers are happy to buy when the industry responds with products that suit their needs.
“The signs are positive for 2011 with new lenders poised to enter the market pointing to more competition and further potential growth.
“The latest Market Monitor now features increased analysis of the equity release sector and now includes a quarterly spot-light on a particular region. This quarter we look more closely at the uses of equity release for those in the South East. The report also now scrutinises more closely a particular use of equity release and this quarter we look at gifting.
“The Market Report now provides by far the most detailed and comprehensive analysis of the sector.”
Across the country 7 out of 12 regions saw growth in the total number of plans sold with the South East seeing the strongest growth – total value released was 16% higher in the three months.
Single advance Lifetime mortgages made up 23% of sales in the first quarter with 7% on enhanced terms compared with 28% in 2010 while reversions dropped from 4% to around 2% of total sales.

Latest News

Figment Europe, a provider of institutional staking infrastructure, writes that it is solidifying its presence in the heart of Europe’s..
Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..

Related Articles

Jigna Gibb, Bloomberg
Bloomberg Indices has recently hired Jigna Gibb as Head of Commodities and Crypto Index Products, to lead its commodities and...
Robert Minter, director of ETF investment strategy at abrdn takes a look at passive investing in commodities and shares his...
Ryan McCormack, Invesco
This year sees the 25th anniversary of Invesco’s QQQ, the USD240 billion ETF – the fifth largest ETF in the...
The European ETF market achieved a record 28 per cent growth – reaching over USD1.8 trillion assets under management (AUM)...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by