More Brits want lifetime mortgages

The demand for lifetime mortgages and other equity release products is rising, new figures reveal.

According to Safe Homes Income Plans (Ship), which represents 90 per cent of the equity release market, a record £1.2 billion worth of lifetime mortgages were sold in 2006 - and this is expected to rise to £1.7 billion by the end of 2007.

"The equity release market has come a long way over the past decade and has made very real strides in its attempt to rid itself from the scepticism that surrounded it in the early years," said Ship chief executive Jon King.

"Equity release has never been cheaper, more accessible or - with full regulation imminent in 2007 - safer.

"Modern drawdown products are a far cry from the inflexible, poor value products of the past."

Five years ago the average cost of a lifetime mortgage was 8.5 per cent, this has since fallen to around six per cent as competition increased (full story).

But while lifetime mortgages and home reversion schemes are becoming more popular and cheaper, Ship expressed some concerns over access to high quality advice.

"The findings from this year's survey highlight the necessity for Ship to continue advances made last year in promoting better advice to the consumer in 2007," said Mr King.

"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.

"The demand from the consumer for these products is clear, now it is up to the industry to ensure that they have access to appropriate, expert advice as well as great value products."