15 November 2006

Equity release market to consolidate over coming year

Duncan Young, Managing Director of Retirement Plus, forecasts
consolidation amongst equity release providers over the coming year.

Speaking on Wednesday at the Mortgage Business Expo Duncan offered several arguments to support his view.

Recent mergers and acquisition activity will lead to a review of
current business structures and product ranges. The intended merger of
Nationwide and Portman Building Societies and the acquisition of the UK
GE Life business by Swiss Re are just two examples.

Growth in the equity release market has not been strong. Although
recent SHIP figures for the third quarter of 2006 showed an increase in
the number of equity release plans being taken out, the total value of
new business being written has increased only marginally compared to
the same time last year.

The fight for market share will continue. Slow growth means
newcomers will need to wrestle market share from existing providers.
With little product innovation being anticipated a 'me-too' product
will not be enough to increase sales.

A strong distribution system will be vital for success. New players
in equity release with a good existing distribution system will have an
advantage.

Duncan Young said: "Consolidation in the equity release industry
will come from a number of angles over the next 12 months -
restructuring as a result of M&A activity, the flat growth in new
business and the departure of some of the smaller players. However, I
anticipate the industry becoming stronger and more efficient as a
result."