Article date: 14 May 2003
Record numbers of people are releasing equity from theirproperties through mortgage-style schemes, according to NorwichUnion, the biggest provider of equity release in the UK.
The number of equity release loans taken out through NorwichUnion was 89% higher in the first quarter of 2003 than in theequivalent period in 2002. The volume of sales was a record for thecompany.
Mortgage-style equity release can work well for many pensionersbecause they can borrow a sizeable lump sum against the value intheir homes, but no repayments are due until the borrower goes intolong-term care or dies.
Of course, these options need to be very carefully explored bycustomers and their families. However, for thousands of people agedover 55 in the UK, equity release offers huge potentialbenefits.
Paul Stokes, head of marketing for Norwich Union PersonalFinance, said: "More and more people over 55 do not want to settlefor having to go without. They are increasingly exploring equityrelease as a way of improving their quality of life. The number ofpeople opting for equity release rose dramatically in 2002, andthis trend is continuing at a pace into 2003."
There has been a turnaround in the perception of equity releaseplans since they first became popular in the 1980s. At that time alack of regulation and some mis-selling caused concerns.
However, today’s products are fundamentally different.They include safety features such as a no negative equity guaranteeto protect customers from the pitfalls of the past.
Also, leading lenders such as Norwich Union belong to thewatchdog and regulatory body SHIP to ensure high standards.
These factors – along with rising property prices, lowinterest rates/low return on savings, living longer and the need tofund inheritance tax – have caused the dramatic resurgence ofinterest in equity release.
Sales of equity release schemes doubled between 2000 and 2002and the Council of Mortgage Lenders projects the UK market couldrise to £50 billion by 2008.
Press office contacts:
Ian Beggs (Norwich Union) - 08703 66 68 71
Lucy Hedderwick (QBO-Bell Pottinger) - 020 7861 2467
Anna Wharton (QBO-Bell Pottinger) - 020 7861 2488
Notes to editors:
- Norwich Union is the leading provider of equity release plansin the UK with the market for equity release products soaring by49% in the past year alone.
- Norwich Union is also a leading provider of life, pensions andinvestment products and one of the leading IFA providers. IFAsprovide around 75% of the company’s long-term savingsbusiness.
- Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group.
- Norwich Union’s news releases are available on the Avivaplc website at www.aviva.com.
- A selection of images are available from the Norwich UnionNewscast site at www.newscast.co.uk.
- Minimum property values apply. Equity release is a lifetimeloan secured against your home. CHECK THAT THIS MORTGAGE MEETSYOUR NEEDS IF YOU WANT TO MOVE OR YOU WANT YOUR FAMILY TO INHERITIT. IF YOU ARE IN DOUBT, SEEK INDEPENDENT ADVICE. A personalillustration and full terms and conditions are available onrequest. Norwich Union equity release limited No. 3286484.Registered at 2 Rougier Street, York YO90 1UU. Not available inNorthern Ireland, the Channel Islands and the Isle of Man.