The equity release market in the UK is expected to reach a volume of £13bn annually in 10 years, according to The European Pensions and Property Asset Release Group (EPPARG) and EY.
EPPARG and EY have published a report titled ‘Global Equity Release Roundtable 2020 survey’, which focused across 13 countries globally.
The greatest barrier to growth of the equity release market in the UK is customer awareness, the survey showed.
Overall, the global equity release market could more than treble over the next 10 years.
The UK is noted as having an equity release market worth £2bn annually, which puts it among the top countries for equity release volume globally.
The report also noted that the UK has in excess of 10 equity release lenders, which also ranks it among the top globally.
The main current funding source for equity release mortgages in the UK is insurance.
Steve Kyle, secretary general of EPPARG, said: “The survey report confirms that equity release providers across the globe are facing similar challenges and opportunities.
“As a global industry, we must now foster awareness of the considerable social and economic benefits that home equity release products can bring, particularly in the light of the global economic downturn triggered by the pandemic.”
“We also advocate a strong focus on standards, such as the EPPARG 10 standards which we have launched in Europe, to build confidence in this innovative product among both investors and consumers.
“It will be vital to grow the global market safely, working in close collaboration with regulators and governments, to demonstrate that equity release is a safe financial option for elderly homeowners seeking to supplement their income.”
Ben Grainger, UK investment advisory co-lead at EY, added: “Equity release is an important element to a retiree’s financial affairs, and growth in the market will bring welcome competition and innovation.
“There is an element of chicken and egg to growth amid the various obstacles, but as investors increasingly recognise the potential of this market and growth does emerge, many of the current challenges will subside.
“Alongside market transformation and growth, it will be key that the advice providers fully align and move at the same pace to ensure that individual, tailored advice is given to users of equity release.”