Richard Fox, chief executive of the Society of Mortgage Professionals, said he had spoken to many advisers who were taking a cautious approach to the marketplace.
He also pointed to the Q3 2006 figures released by Safe Home Income Plans as a sign of the stagnation. The statistics showed that while sales had grown through each quarter this year, Q3 2006 had similar levels of business to Q3 2005.
Fox commented: “It is clear lenders are not seeing the appetite from the public for this product. I’ve met with advisers and they’re saying there’s still a lot of caution from their side. Consumers are not happy as the sales are complex and for advisers, there are low profit margins and many enquiries are not carried through to fruition.”
However, Fox believed there were some encouraging signs, such as the entry of HSBC into the sector in 2007.
Peter Fisher, director at Nursing Home Fees Agency, said: “There has been a lot of press about significant growth but the true size of the market is only those who would benefit from an equity release product.
“Providers are saying they aren’t getting the business from the IFAs and you’re seeing them launch direct-to-consumer operations to try and get business that way.”
