The latest figures from equity release trade body SHIP show that the rate of decline in the market has slowed and indicate that growth will resume this year.
The equity release market saw the value of advances remain relatively stable in quarter two, at a of total £196.7million, a smaller decline than that seen in the previous quarter, and, even though the market is still falling, the average amount of value released by homeowners has increased.
Retired homeowners are now using equity release to unlock an average value of £45,702 from their homes, up from £45,251 in the previous quarter.
In the last 12 months, several lenders have left the equity release sector, but the data also shows that the remaining equity release providers have picked up the slack left by those which withdrew from the market, suggesting that growth will resume this year, says SHIP.
The trade body believes that the remaining providers are "ideally placed" to help potential equity release customers, with SHIP members reporting strong figures for the first half of the year.
Drawdown equity release is still the most popular form, accounting for more than half of the market.
Andrea Rozario, director general of SHIP, believes that the figures mark a turning point for the equity release market, suggesting that "the decline in the market, which started in the final quarter of 2008, has reached its nadir."
SHIP has been working successfully with the Government to encourage it to add weight and support to equity release as a viable solution for retirement funding.
"Finally, it is clear that current providers are absorbing the demand which was previously supplied by those exiting the market in the last 12 months," Ms Rozario said. "I look forward to seeing reports of strong growth from members over the coming months."
© Fair Investment Company Ltd
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