Tuesday, July 13
Thursday, June 17
Partnership to return to equity release market
Annuity provider Partnership is set to return to the equity release market this year.
The company is expected to focus on clients with lifestyle impairments, mirroring their approach to enhanced annuities.
The news follows the return of More2Life to the market with a new lifetime mortgage.
With a number of providers having pulled out of the market last year, it is greatly encouraging to see some returning.
The company is expected to focus on clients with lifestyle impairments, mirroring their approach to enhanced annuities.
The news follows the return of More2Life to the market with a new lifetime mortgage.
With a number of providers having pulled out of the market last year, it is greatly encouraging to see some returning.
Monday, June 14
More 2 Life returns to equity release
Some welcome good news for the equity release market; More 2 Life has relaunched a lifetime mortgage after a 2 year absence.
Recent times have seen a succession of equity release providers withdraw from the market place so it can only be good news to see this change.
This follows Bridgewater Equity Release raising their maximum release for their home reversion plan from £100,000 to £250,000.
Recent times have seen a succession of equity release providers withdraw from the market place so it can only be good news to see this change.
This follows Bridgewater Equity Release raising their maximum release for their home reversion plan from £100,000 to £250,000.
Wednesday, April 28
Equity Release Market Remains Robust
Value of equity release advances in Q1 2010 at £213.4m
Drawdown mortgages continue to be most popular product (£116.4m)
Home Reversion plans jump 10% to £4.4m
SHIP, the equity release provider trade body, today announced equity release market figures for the first quarter of 2010. Initial data for the start of the year taken from all of the members indicates that while the market is suffering some effects from the loss of providers, demand is strong and activity remains buoyant.
Home reversion advances rose by 10% on Q4 2009 to £4.4m. Drawdown mortgages remain the most popular form of equity release, claiming over half of the market share (55%) with £116.4m worth of advances. Lump sum mortgage sales were £92.6m in the quarter. The distribution of equity release continued to be dominated by intermediaries, who accounted for 79% of all sales.
Overall the value of the equity release market has fallen by 13% from £244.7m in Q1 2009 to £213.4m in Q1 2010. The total number of customers YOY has fallen by just 7%. The percentage of sales through intermediaries has remained stable at the 79% mark.
Drawdown mortgages continue to be most popular product (£116.4m)
Home Reversion plans jump 10% to £4.4m
SHIP, the equity release provider trade body, today announced equity release market figures for the first quarter of 2010. Initial data for the start of the year taken from all of the members indicates that while the market is suffering some effects from the loss of providers, demand is strong and activity remains buoyant.
Home reversion advances rose by 10% on Q4 2009 to £4.4m. Drawdown mortgages remain the most popular form of equity release, claiming over half of the market share (55%) with £116.4m worth of advances. Lump sum mortgage sales were £92.6m in the quarter. The distribution of equity release continued to be dominated by intermediaries, who accounted for 79% of all sales.
Overall the value of the equity release market has fallen by 13% from £244.7m in Q1 2009 to £213.4m in Q1 2010. The total number of customers YOY has fallen by just 7%. The percentage of sales through intermediaries has remained stable at the 79% mark.
Tuesday, November 24
Prudential withdraw from equity release, but all is not lost
There was disappointing news this week when Prudential announced their withdrawal from the equity release market from early 2010.
Their stated reason for ending their four year stint as a lifetime mortgage lender is that “a significant cash expense is incurred up front in acquiring new business and the payback period on capital employed is long. We have concluded that this is not sustainable and that we can deploy cash and capital more effectively across other parts of our business”.
Their market share was 12% in 2009 of an estimated £1bn market so another interpretation could be that £120m of lending isn’t worth the effort and, as a multi-national colossus, they can make more money elsewhere. Those who think the only winners in equity release are the lenders may need to think again.
It is worth bearing in mind that Prudential have form for this behaviour. They once pulled out of the protection market leaving clients and advisers high and dry. At least on this occasion they have given some notice and will continue to service their existing 14,000 customers.
Prudential is by far the biggest name on a list of lenders who have pulled out of equity release in recent times. With the exception of Northern Rock (who had a notional presence since their fall from grace in 2007) and National Counties Building Society, most of those were relatively new to the sector.
So the credit crunch has crunched hard on the equity release sector this year but it is not all doom and gloom.
Vanessa Owen, head of equity release at LV=, says: “We’re a little surprised at the Prudential’s move and believe it could turn out to be a missed opportunity for them. We see this market as a growth area and LV= is still committed to offering equity release.”
Just Retirement have stated that Prudential will have no bearing on its position or strategy within equity release and that the company “remains fully committed to this market for both its profitability and long term growth characteristics.”
Hodge Lifetime and Stonehaven have made similar statements.
Those that remain in the equity release market stand to make the most of others’ absence.
By David Wright
Managing Director
Sixty Plus - The Equity Release Specialist
Their stated reason for ending their four year stint as a lifetime mortgage lender is that “a significant cash expense is incurred up front in acquiring new business and the payback period on capital employed is long. We have concluded that this is not sustainable and that we can deploy cash and capital more effectively across other parts of our business”.
Their market share was 12% in 2009 of an estimated £1bn market so another interpretation could be that £120m of lending isn’t worth the effort and, as a multi-national colossus, they can make more money elsewhere. Those who think the only winners in equity release are the lenders may need to think again.
It is worth bearing in mind that Prudential have form for this behaviour. They once pulled out of the protection market leaving clients and advisers high and dry. At least on this occasion they have given some notice and will continue to service their existing 14,000 customers.
Prudential is by far the biggest name on a list of lenders who have pulled out of equity release in recent times. With the exception of Northern Rock (who had a notional presence since their fall from grace in 2007) and National Counties Building Society, most of those were relatively new to the sector.
So the credit crunch has crunched hard on the equity release sector this year but it is not all doom and gloom.
Vanessa Owen, head of equity release at LV=, says: “We’re a little surprised at the Prudential’s move and believe it could turn out to be a missed opportunity for them. We see this market as a growth area and LV= is still committed to offering equity release.”
Just Retirement have stated that Prudential will have no bearing on its position or strategy within equity release and that the company “remains fully committed to this market for both its profitability and long term growth characteristics.”
Hodge Lifetime and Stonehaven have made similar statements.
Those that remain in the equity release market stand to make the most of others’ absence.
By David Wright
Managing Director
Sixty Plus - The Equity Release Specialist
Thursday, November 12
Equity Release borrowers get benefits boost
The Government has made a number of changes to the benefit rules that may reduce the impact that equity release could have on means tested benefits.
Andrea Rozario, director general of SHIP, explained: "Over the last nine months, the Government has announced changes that we believe will mean that those consumers who wish to take out an equity release plan can do so in the knowledge that they may not see certain benefits reduce or cease all together.”
The Government has changed the rules on the application of an Assessed Income Period rules (AIP) within Pension Credit for those aged 80 years old or over. From April 2009, these customers will no longer have their retirement income and assets reviewed every five years, nor do they need to report any changes that occur to these. In effect those aged 75 and over, if in an AIP will benefit from this change.
They have raised the capital threshold to £10,000 in Pension Credit and pension age Housing Benefit and Council Tax Benefit from November 2009, which means that pensioners can have up to £10,000 in savings without it affecting their benefit. If pensioners take out an equity release product and overall their savings remain at £10,000 or below, there will be no impact on their benefit payments.
David Wright of Equity Release Specialists Sixty Plus said “State benefits have always been one of the important matters to consider when looking at equity release so it is good news for everyone that the savings limit has been increased.”
Andrea Rozario, director general of SHIP, explained: "Over the last nine months, the Government has announced changes that we believe will mean that those consumers who wish to take out an equity release plan can do so in the knowledge that they may not see certain benefits reduce or cease all together.”
The Government has changed the rules on the application of an Assessed Income Period rules (AIP) within Pension Credit for those aged 80 years old or over. From April 2009, these customers will no longer have their retirement income and assets reviewed every five years, nor do they need to report any changes that occur to these. In effect those aged 75 and over, if in an AIP will benefit from this change.
They have raised the capital threshold to £10,000 in Pension Credit and pension age Housing Benefit and Council Tax Benefit from November 2009, which means that pensioners can have up to £10,000 in savings without it affecting their benefit. If pensioners take out an equity release product and overall their savings remain at £10,000 or below, there will be no impact on their benefit payments.
David Wright of Equity Release Specialists Sixty Plus said “State benefits have always been one of the important matters to consider when looking at equity release so it is good news for everyone that the savings limit has been increased.”
Thursday, October 15
Independent advisers accounts for 74% of all equity release plans sold between July and September, according to figures from SHIP, reports Mortgage Strategy.
The adviser share of the equity release market has climbed 10% since the three months to June, continuing the recent trend for brokers to account for the majority of equity release business.
The equity release market is down 22% against the same time last year when total lending was £303.3m.
The number of new equity release customers dropped by 2.5% quarter-on quarter from 5333 to 5198, and has dropped 35% on an annual basis.
Average amounts lent through equity release increased by 3.9% in Q3 to £45,434, compared with £43,746 for the previous three months.
Andrea Rozario, director-general of SHIP, says:“The drop in the number of plans sold can be partly attributed to the funding issues that the industry is currently facing.
"While equity release providers are experiencing high levels of customer demand, a significant impact on the quarter’s business figures has been the lack of liquidity in the overall market which has restricted the lending activity of some providers and resulted in the withdrawal from the market of some others."
Sixty Plus Comment: It is pleasing that customers are becoming more aware of the importance of independent advice.
The adviser share of the equity release market has climbed 10% since the three months to June, continuing the recent trend for brokers to account for the majority of equity release business.
The equity release market is down 22% against the same time last year when total lending was £303.3m.
The number of new equity release customers dropped by 2.5% quarter-on quarter from 5333 to 5198, and has dropped 35% on an annual basis.
Average amounts lent through equity release increased by 3.9% in Q3 to £45,434, compared with £43,746 for the previous three months.
Andrea Rozario, director-general of SHIP, says:“The drop in the number of plans sold can be partly attributed to the funding issues that the industry is currently facing.
"While equity release providers are experiencing high levels of customer demand, a significant impact on the quarter’s business figures has been the lack of liquidity in the overall market which has restricted the lending activity of some providers and resulted in the withdrawal from the market of some others."
Sixty Plus Comment: It is pleasing that customers are becoming more aware of the importance of independent advice.
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