The equity release voluntary industry body SHIP, (Safe Home Income Plans) has reported a fall in the volume of equity release business written.
Equity release was tarnished with a bad name in the 1980's and we always assume that business volumes drop in this area because consumers think twice. At the moment, this is not true. The reason business levels have fallen is because lenders are shying away from the equity release market.
SHIP has blamed the fall in business on pending regulation for the equity release market.
Our View
Mortgage based equity release plans will become regulated with effect 31 October 2004. Home reversion schemes are likely to become regulated two years later, although no date has yet been set by the Government. As soon as the issues over regulation have been clarified, we are sure that more lenders and providers will enter the equity release market.
The increased competition will be great for consumers, especially as the advice and products they receive will also be subject to regulation.