The equity release industry has bucked market trends to record a rise in business volumes during the second quarter of 2008.
A report from Safe Home Income Plans (SHIP) members says the sector is affected by very different market forces compared with mainstream mortgage products.
The volume of equity release business grew to £275.7m in the second quarter, up 14% from £242.7m.
Andrew Rozario, director general of SHIP, says: “This success underlines the robust health of the equity release sector despite the impact of the credit crunch that is having such a negative effect on the mainstream mortgage market.
“It also serves to highlight the distinctly different forces that drive the equity release market relative to the mainstream market, including the fundamental pressures of the UK's ageing population, falling levels of pensions contributions and the very high levels of personal wealth held in housing equity.”
The intermediary channel continues to be the main form of distribution for equity release products, accounting for 71% of all loans, but down from 74% in the first quarter of 2008.
Drawdown products continued to be popular accounting for 42% of loans while lump sum mortgages make up 53% of loans.
Rozario believes the recent surge in business may be due to people concerned about falling property prices seeking to release equity quickly before their home value declines further.
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