Some 80% of intermediaries expect income from equity release products to grow substantially over the next five years, according to actuarial consultants, Tillinghast Towers Perrin.
By 2008, one in eight expects equity release to generate between 10% and 20% of their annual income, with one in 12 expecting over 20%. Only one in five is not expecting any growth.
Stuart Robinson, a consultant at Tillinghast Towers Perrin, said: ‘Our research shows 40% of IFAs are not currently generating any income from equity release, and of those who are, the majority are not selling many products. However, many clearly believe this situation is changing and there is considerable evidence to support this.’
Tillinghast estimates the equity release market has growth potential of £4bn-£5bn of new business each year for the next decade.
Jon King, chairman of Safe Home Income Plans, said: ‘The early 1990s saw business in the £20m range. 2002 will be just below a billion, but whether £4bn is a conservative estimate or not depends on new entrants to the market.
‘It is demand driven and the more providers, the more business the market will see,’ he added.
The survey also noted 50% of IFAs believe the public image of the industry needs to be raised and improved.
Ian Beggs, media relations manager at Norwich Union, agreed: ‘There is rising awareness in both the intermediary and consumer sectors, as proven by the number of firms looking to enter the market.
‘What will help increase demand is the Government’s recent Green Paper proposals to regulate the entire equity release market (see Mortgage Solutions 27 January, page 4). Nothing will raise the profile of the market better than being properly regulated.’