Demand for equity release mortgages increases

The equity release sector continued to increase in size last year, with new research revealing that demand for the service has grown by nine per cent in the past twelve months.

Figures published by Key Retirement Solutions also indicated a 25 per cent increase in the amount of equity released by retirees, amounting to £1.4 billion over the course of 2007.

However, the survey also discovered a fall in the take-up of lifetime mortgages, as retirees instead chose growing numbers of reversion scheme and drawdown mortgage products.

Dean Mirfin, business development manager at Key Retirement Solutions, commented: "Despite the ever volatile landscape of the UK economy, the demand for equity release continues to rise."

"The increase in the drawdown facility is in line with predictions as many consumers prefer the option due to the cost advantages of the product, and consumers feel more in control of their money choosing to make withdrawals as and when they needto.

"With the introduction of home reversion regulation in April 2007, in line with lifetime mortgages, demand for these plans has remained constant," he added. "If in 2008 we do enter a period of zero growth in property prices, or even a downfall for some, then reversion plans will become more appealing."

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