The majority of financial advisers expect the equity release market to exceed the £5 billion mark next year, according to new research from Canada Life. 51% predict the amount lent will reach between £5-6 billion.
A further 1 in 5 (20%) of advisers expect even higher levels of growth next year, believing sales will be above £6 billion.
Time will tell whether advisers’ predictions for this year will come true, as almost half (46%) forecast that the equity release market would be valued at between £4.5-6 billion in 2019. £2.8 billion had already been lent by the end of Q3 2019, according to the Equity Release Council.
The growth of the market in 2020, according to 75% of advisers, will be driven by an increase in awareness and comfort with equity release amongst homeowners.
Alice Watson, head of marketing and communications at Canada Life Home Finance, said:
“The equity release market has seen year on year growth since 2012, and it looks like this trend will continue in 2020. Despite this performance, the market still has a long way to go to reach its full potential. Our latest research suggests that over 55s in the UK actually have £383 billion of equity in their property to tap into.
“To make the most of this, we’ll continue to work with advisers in 2020, so they can better help clients understand the product, and better understand the barriers clients face.” According to advisers the biggest barrier they are facing when it comes to equity release is negative perceptions of home finance products among clients, selected by over 3 in 4 respondents (77%)."
Alice Watson adds:
“We know there are still some misperceptions out there about lifetime mortgages. To address some of these, we recently launched our Equity Release Explained brochure which is designed to help people talk to their friends and families about equity release and bust some of the key myths surrounding the product.”
A copy of the Equity Release Explained brochure is available to download here: