Reports from the Bank of England this months states that equity withdrawal ( equity release through a remortgage ) has fallen sharply by almost two thirds. According to the new figures released, equity withdrawal has fallen from almost 14bn during the first quarter of 2007 to just 5bn in the same period this year, the lowest equity withdrawal figures for seven years.
The fall in the equity withdrawal figures is blamed on the global credit crunch which has seem lenders tightening their criteria for lending and as such fewer home owners are able to borrow money to pay for home improvements, pay off debt or simply to provide a little relief as disposable incomes are squeezed. Read the rest of this entry »
It was announced that Northern Rock are to sell their equity release portfolio to JP Morgan today. Although Northern Rock are going to run of the equity release portfolio on behalf of JP Morgan, the sale will help them to pay back some of the money that they borrowed from the Bank of England.
Northern Rock’s portfolio accounts for a great deal of the UK mortgage market, however after being embroiled in the global credit crunch problems has meant they were unable to borrow money to fund their business practices, hence the bail out by the UK’s main bank.
The portfolio of lifetime mortgages prior to the sale to JP Morgan is said to make up approximately two percent of Northern Rock’s assets. At the time of writiing, Northern Rock offer three equity release products
- Standard Lifetime Mortgage
- Cash Plus Lifetime Mortgage
- Protected Equity Lifetime Mortgage
Chief Executive Andy Kuipers is happy about the equity release portfolio sale. He said “It illustrates the quality of our assets, which has enabled us to achieve a sale at a premium despite continuing difficult financial markets“.