Total Equity Release lending has fallen from £240 million to £183 million. As a direct result the average loan amount has fallen by 15.33% to £44,948 (2008 Q1 – £53,084).

Equity Release Market Monitor for Quarter 1 of 2009 shows that the mixture of a 7% drop in plan numbers and a 16% drop in house prices has resulted in a fall in lending for the sector of almost 24%. This is the largest fall KRS has recorded since it began monitoring the sector in 1998.

The average property price in all regions of the UK has fallen dramatically with falls a high as 26% in East Anglia, 24% in Scotland and 20% in the East Midlands. London fared best with a 6% fall. With such dramatic property value changes KRS says there is no way that the equity release market could not be unaffected.

London continues to show the largest average amount released at £91,845, followed by Northern Ireland at £53,850. However, Northern Ireland has seen a considerable stall in plan numbers with a 66% fall in the number of plans being arranged.

Despite a reduction in the number of plans taken out during the quarter and in the values, some regions showed positive growth. East Anglia and the West Midlands showed an increase in both plan numbers and levels of borrowing.

The Market Monitor continued to show that the most popular use of the equity released from consumers’ homes was for home or garden improvements (58%). One in three (33%) used the money to go on holiday and 19% used it to help out family or friends, as parents are helping their children to get onto the property ladder or helping them meet their commitments in the current economic climate.

Debt repayment is consistently one of the prime motivators for releasing equity, with 23% repaying an outstanding mortgage and a further 33% repaying other forms of debt.

Equity release has continued to prosper over recent months and is now helping more and more people who are asset rich but cash-poor. The high standard of regulation and the role of SHIP mean equity release provides consumers with a reliable and secure way to make use of some of the equity locked within their property in order to supplement retirement income.

Former home secretary David Blunkett has advocated the use of equity release as a way of freeing up money in retirement. In a speech to charity Counsel and Care in London, Blunkett says that the responsibility of providing for the older generation should fall to the individual and the family, rather than the government.

He adds: “There is a total of £700bn tied up in home ownership by those in retirement. Through equity release programmes, a proportion of assets could alleviate the need to sell up or to enter residential care by offering the cash needed to sustain the existing lifestyle.”

The equity release market has done a great job to transform itself into a highly customer focused sector within a tightly regulated environment.

For more information about equity release mortgages or to find out how Enable Finance can guide you in the right direction to an quity release solution for you please call 0845 070 2050