Rising demand for lifetime mortgages

A record breaking £1.2billion worth of lifetime mortgages were sold in 2006, reveals Safe Home Income Plans (Ship). This figure is expected to rise to £1.7billion by the end of this year.

According to Ship’s Chief Executive, Jon King, the equity release market has made great progress over the last ten years, despite people being generally wary and unsure of it initially.

In his opinion equity release has become more affordable and more accessible and once it receives full regulation in 2007 it will also become much safer. The whole business has come a long way from ‘inflexible, poor value products’ from years ago.

The average cost of a lifetime mortgage five years ago was 8.5%. Nowadays this figure has lowered to roughly 6%-mostly due to the amount of competition.

Despite these products’ increased popularity, Mr King feels Ship still has an important role to play in ensuring consumers are being offered good, sound advice.

He says, “Reassurance of the security of all products provided by Ship members must be made apparent and more confidence needs to be instilled amongst the IFA {Independent Financial Adviser} community.

He believes we can clearly see the need for these products and it is the industry’s duty to supply consumers with, “access to appropriate, expert advice as well as great value products.”