The members of UK equity release industry body, SHIP (Safe Home Income Plans), that represents over 90% of the Equity Release sector, have reported third quarter figures to 30 September 2006 that show the increasing popularity of equity release plans.

The total value of new business written in Q3 2006 was £295.1 million, an increase of 12.3% on Q2 2006 (£262.8 million) but only slightly (0.51%) ahead of Q3 2005 (£293.6 million). This contributes to an annual rolling year total figure of £1,134.5 million to 30 September 2006.

However, year on year, the number of new cases has risen strongly from 6,446 in Q3 2005 to 6,954 in the latest figures- an increase of 7.9%. With increases at this level the number of new plans issued by the end of 2006 is set to reach a record of nearly 28,000.

This increase in new cases also contributes to an overall number of current plans of 128,214 – over 4,000 more plans than at the end of Q2 (Q2 2006 123,795) and over 22, 000 more plans than Q3 2005 (Q3 2005 105,523).

This increase in cases can again be explained by the growing popularity of flexible drawdown mortgages. The number of drawdown plans sold in Q3 2006 was up 32.6% from 1,362 in Q2 2006 to 1,806 in Q3 2006.

Year on year, the value of written lifetime mortgage business rose only fractionally from £276.3 million to £276.9 million.

In contrast, home reversions showed a greater increase, now accounting for £18.2 million worth of new business, up 5.2% year on year (Q2 2005 £17.3 million).

Jon King, Chief Executive of SHIP said: “The latest figures show how the equity release market continues to increase in popularity. Whilst overall business value figures, compared year on year are flat, this last quarter has seen a healthy increase compared to Q2 2006.

The continued popularity of flexible drawdown products has resulted in a healthy rise in the number of cases. If the number of new cases continues to grow at this rate we could be set for a record year for new business.”