The UK’s equity release market held steady in the final quarter of 2009, taking into account seasonal factors.
According to industry body, Safe Home Income Plans (SHIP), volumes declined by 1.9% on the previous three months while the value of the average advance showed a 4% increase.
With more homeowners seeking flexible deals, the number of drawdown mortgages sold rose by 5% to 3,057, or 54% of the equity release market.
Meanwhile, home reversion sales increased by 28% quarter-on-quarter; in this case borrowers opting for a guarantee that only an agreed portion of a property has been sold, regardless of future house price falls.
Eight per cent fewer equity releasers opted for lump sum mortgages, this area of the market having already been depleted by product withdrawals.
Total figures for 2009 show the equity release market falling 14% in value compared with a year earlier, to £1,095.8 million; volumes declined 27% to 20,492 as funding remained tight.
SHIP general director, Andrea Rozario, comments: “The equity release industry- in common with the entire UK financial services industry - has faced a difficult and challenging year.”
He adds: “However, there are encouraging signs with both providers and IFAs having recently reported increasing demand from consumers.”