The Market Monitor provides up to date analysis on the market over the past year, highlighting key trends and business levels for the sector.
KRS said that while numbers were down the result did reveal some resilience for the market. At the half way point the number of new plans was 17% down compared to the same period of 2008, showing that the result overall has remained consistent rather than the gap widening.
New lending figures exceeded the £1billion mark at £1.02billion. This is a 14% reduction compared to 2008 (£1.19 billion). This reduction is relatively in line with plan numbers but also is as a result of lower average property values and increased take-up of drawdown plans. This option allows clients to draw down the funds in stages, as and when required, which can heavily reduce the overall cost.
The Market Monitor also reveals the usage trends for the money released. The most dramatic change year on year comes in relation to those using the money to repay non-mortgage debt. This has increased to 35% of customers from 11% in 2008 helping many retirees free up much needed income.
Dean Mirfin, Key Retirement Solutions Group Director, said: "2009 has been a challenging year for all sectors of our industry. The equity release sector has not been immune to the effects of the current economic climate as is evident from the results for the year.
"The main measure for the result is the number of new plans and whilst a 17% fall is considerable the positive to take from the result is the fact that this level was maintained throughout the year, and that demand continues to be strong as we enter the first quarter of the new year.
"The uses of equity release continue to be widespread, however the considerable increase in the use of funds to repay debt is one of the greatest trend changes we have seen. The trend of debt repayment mirrors the trend across all ages in the UK of clearing debt and freeing up more disposable income and no doubt we will see this continue further still in 2010.
"Equity release is still providing a major boost to many retirees who have been hard hit by falling annuity rates and miniscule levels of return on their savings. As property values continue to increase, albeit slowly, this will further add to the attractiveness of releasing the wealth tied up in our homes to better our standard of living."
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