Most financial advisers are expecting the equity release market to exceed the £5bn mark in 2020, new research from Canada Life has revealed.
The research, which comprised an online survey of 146 equity release qualified financial advisers and was carried out by Canada Life in November, found that 51% of respondents were predicting the amount to be lent in 2020 will reach between £5bn and £6bn.
The data showed a further 20% of advisers are expecting levels of growth to be even higher next year, suggesting sales will exceed £6bn.
The growth of the equity release market in 2020 will be driven by an increase in awareness and comfortability with equity release amongst homeowners, according to 75% of responding advisers.
Canada Life head of marketing and communications, Alice Watson, commented: “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 £383bn 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.”
Canada Life’s research also suggested 46% of advisers are forecasting the equity release market to be valued between £4.5bn and £6bn by the end of 2019.
Data from the Equity Release Council has revealed £2.8bn had already been lent by the end of the third quarter in 2019.
The research also revealed that 77% of respondents suggested the biggest barrier in the equity release market that advisers must contend with is the negative perceptions of home finance products amongst their clients.
“We know there are still some misperceptions out there about lifetime mortgages,” Watson continued. “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.”
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