Growth Expected For Equity Release Loans
Last year saw a number of large players in the equity release loan market withdraw from the business altogether, due to economic conditions and a lack of available funding for loans through the wholesale money markets.
Despite these negative signs, several new companies also started to provide equity release loans and products and those firms who are remaining in the market have adapted well to the changes in the economic environment, providing a positive outlook for the equity release loan market, according to the equity release trade body.
SHIP (Safe Home Income Plans), has just released the latest figures for the second quarter of this year and say that the situation is looking positive for continued growth in the equity loan sector, with the new and existing providers picking up the market share of those lenders who withdrew from the business.
The figures show that sales of equity release loans remained relatively constant in the second three months of the year, although the average size of an individual loan increased from £45,251 to £45,702, between the first and second quarters of the year.
It would also appear that potential borrowers are seeking professional advice before taking out an equity release loan, with around 81 per cent of all borrowers obtaining their loan through a financial adviser or loan broker.
SHIP now believe that the recent decline in the equity release loan market has turned the corner and that we will now see some positive signs of growth as confidence returns.
Andrea Rozario of SHIP commented on the figures, she said “I am pleased to see the tide of withdrawals from the market may finally be turning with the re entry of a former provider, More2 life, in recent months. Finally, it is clear that current providers are absorbing the demand which was previously supplied by those exiting the market in the last twelve moths. I look forward to seeing reports of strong growth from members over the coming months.”
