Equity Release Loans On The Increase
We have reported recently on the news that a number of equity release loan providers have withdrawn from the market, either on a temporary or permanent basis, blaming a lack of consumer interest and available funding as the reasons for doing so.
Despite this decline in the number of loan providers, the latest statistics from Key Retirement Solutions have revealed that the amount of interest in equity release loans has grown in both number and amount in the past three months of this year, as more and more people entering retirement take advantage of the value locked up in their home.
Equity loans have seen a steady increase in numbers since the beginning of this year, resulting in 6,123 loans being taken out over the course of the third quarter of the year, showing a 19 per cent increase in cases above the previous three months.
The total amount released also increased by 13 per cent over the same period, with a total amount of £214 million being offered as new loans. The largest growth area for equity release loans has been that of debt consolidation, as many individuals use the plans to repay their outstanding personal loans, credit cards and remaining home owner loans and mortgages.
Dean Mirfin of Key Retirement Solutions said “The continued growth in the number and value of plans throughout 2009 is very encouraging. Pensioners are hard hit by the current climate, experiencing higher rates of inflation and previously unknown low levels of returns on their savings, as a result equity release is providing a strong support for those who want to maintain a good quality of life in retirement.
We expect the last quarter of the year to be equally strong as more confidence emerges. Whilst a number of providers have temporarily had a break from the market of late we expect that a number will soon return, stronger and wiser. The demand for greater income or capital in retirement is continuing to grow and as a result equity release has to be a serious consideration for anyone who wishes to boost their provision in, or approaching, their retirement.”
