Boom time for equity release

The business of equity release, where financiers buy part or all of pensioners' homes at a discount but let them live in them until they die, is booming thanks to the house-price slide.

Sovereign Reversions says it can now snap up more properties at bigger discounts, and has expanded its assets by 17% to £77.9 million during the year.

"Falling house prices don't spell disaster for Sovereign - quite the opposite," chief executive Graeme Marshall said. "We buy a share of people's homes at a discount to market value, giving us a large cushion against a volatile property market."

The company said "embedded value per share" - the value of the group's assets at vacant possession - has risen 7.5% to £93.2 million. It has increased its annual dividend by 8.6% with the first interim payout of 1.575p in September.