Equity release providers have a measured confidence in the growth of the market for the year ahead, according to research from equity release trade body Safe Home Income Plans (Ship).
In the fourth annual Ship member survey, over 90 per cent of providers said the volume of new business would increase in the next year.
Looking to the long term, the general predictions given were that the market would grow by over £200m a year, increasing to £1.4bn in 2009 and £1.7bn in 2010.
Over two thirds of providers (67 per cent) felt that a strong driver for this growth would be interest rate reductions on equity release plans in the next quarter.
The research found that the majority of lenders predict most growth to be in flexible drawdown options.
Providers believe that drawdown will account for 70 per cent of the market by 2010, with 80 per cent of respondents pushing for more providers to offer a drawdown option.
Less than half of those polled (42 per cent) think that the lifetime mortgage business will increase in the first quarter of 2009, and in a departure from the 2008 predictions, 83 per cent think the number of home reversions sold will decrease or remain static in this period.
This market growth will offer IFAs real opportunities during 2009 - 89 per cent of providers have already seen the number of referrals from IFAs increase in the past year.
Andrea Rozario, director general of Ship, said: "The wider economic situation means that 2009 will be an unpredictable year. Many repercussions from 2008 will continue to be felt across the industry as a whole.
"This survey has shown that Ship members remain confident in the future of the equity release market, as they consider the long term prospects.
"The jump in the number of IFA referrals to providers shows that although there is still a need to educate IFAs about the benefits of equity release, the industry is coming together to recognise and promote the benefits of equity release."
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