The future for the equity-release market is looking bright as illustrated by the rising number of equity release plans sold this quarter, as well as the future launch of products, such as Prudential’s property value release plan.Research from Key Retirement Solutions shows the number of equity-release schemes has broken the 100,000 mark for the first time. Defaqto has also just released a report predicting the equity-release market will grow considerably over the next few years as well as the number of providers. GE Life product and marketing manager Simon Little thinks equity release has a very important role to play in many different ways as people near retirement. He says: “I think over two or three years, the momentum behind equity release will gathered speed. This has been evident since lifetime mortgages became regulated last October and has just put them on a more solid footing, which is encouraging more IFAs to get involved in this market.” But he notes it is still important that providers and distributors work together to operate within the new regulation and he says if the industry takes this line it will erase any risk of misselling in future. Bridgewater Equity Release managing director Peter Couch thinks higher consumer confidence levels partly account for the rise in sales of equity-release schemes. He says: “People have realised the products are now safer. There are a lot more advisers out there who are advising on them and the fear factor of the negative-equity days are disappearing into the mist.” As more providers enter the market, Couch says competition will increase and prices will be driven down and there will be more variety as providers try to develop a unique selling point. He is pleased more big providers are coming into the market as it creates credibility. Ship chairman Jon King expects to see substantial growth in the longer term – five years plus – because it is taking time for the market to mature. Ship, which represents more than 90 per cent of the equity-release sector, reported a four per cent rise in the amount of new business written in the second quarter compared with the first quarter. King thinks the market is split into three categories: providers who are offering the lowest possible rates; providers who are offering larger loan to values than other lenders and the development of flexible drawdown products. King says: “This represent a sea change in terms of where equity release is going.” Lifetime Mortgages continued to outsell reversion schemes but the number of reversions rose for the first time since 2000. Couch thinks this is a trend that will continue. He says reversion sales are rising for two reasons. First, that MCOB 8 says anyone who advises on a lifetime mortgage must make reference to a home reversion as an alternative option and, second, because providers will start introducing more flexible products and therefore reversion will be the right answer for some customers. He adds: “I do not think reversions will ever be right for more than one in five cases because four out of five people will have specific needs that a reversion cannot meet and one in five people will have specific require-ments that lifetime mortgages do not provide.” In terms of the growth in reversion business, King thinks Ship can take some credit for it due to the interim regulatory regime it introduced. The Government has com-pleted the third reading of the Land Transaction Bill which is the regulation of reversion. He says: “Confidence is returning and people are realising that the housing market goes through phases and if the housing market does not continue to grow as it has done in recent years, then a rever- sion can make a lot of sense because you are selling out at a higher price.” Defaqto found that most equity-release customers are opting to take the proceeds as a cash lump sum rather than as a method of supplementing monthly income. It believes many more providers will offer drawdown facilities as an option to their customers – a view shared by Couch. Bridgewater is looking at developing a form of drawdown, whereby a customer will sell part of their property over a period of time so that they retain the upside of their property while they own it. Couch believes this type of product development will become popular because people will want a combina-tion of a cash lump sum and a regular income. King agrees: “What we are seeing now is probably more product innovation at any time I can remember since the early 90s. “Flexible products are becoming more popular and is a good indication of where the market is going to go.” In his other role as managing director of Hodge Equity Release, King says it launched a flexible draw-down product three months ago and already it is the company’s best-selling plan.