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Equity release market to exceed £1bn

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The equity release market could exceed £1 billion this year after the third quarter saw plan sales and lending rise by 11%.

Figures from Key Retirement Solutions (KRS) show total lending rose to £256.6 million in the three months to the end of September.

According to KRS, the figure would have reached £383 million if unreleased drawdown funds were added.

Plan sales rose 10% to 5,260 over this period compared with 4,779 in Q3 2011. There was 11% growth in total lending over the same period.

The research found a fifth (19%) of customers used some or all of the cash to pay off mortgages.

Drawdown made up 70% of total sales compared with 29% for lifetime mortgages and 1% for reversion plans.

Across the UK, nine out of 12 regions saw growth in the number of plans sold with Northern Ireland recording a rise of 75%. The North and London saw rises of 34% and 35% respectively. However, Yorkshire & Humberside had a fall of 9%.

Dean Mirfin, group director at Key Retirement Solutions said “The on-going squeeze on pensioner income and the ticking time bomb of interest-only mortgages are making the case for equity release.

“Continuing innovation in the market with the launch of plans designed to tackle interest-only issues as well as enhanced products for people with medical and lifestyle conditions underline how the market is expanding.”

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