Six out of ten equity release advisers say house prices will continue to fall in 2023, according to a poll from Canada Life.  

The financial services group says 62% of advisers predict that the price of a home will slide — with 31% anticipating it will fall by between 5% and 10%, pointing to “further disruption for the housing market this year”.  

House prices fell 3.1% to £257,122 on an annual basis in March, the fastest rate of decline for 14 years, according to Nationwide data last week.   

The data comes amid continuing cost-of-living concerns, which has seen interest rates and inflation rise repeatedly over the last year to stand at 4.25% and 10.4%, respectively.  

The reasons why equity release advisers forecast house prices will continue to slip are due to high interest rates, say 44%, concerns around the cost-of-living impacting plans, 33%, and an already inflated property market, 30%, the poll points out.  

It adds that advisers are split on the potential for the equity release market, with 43% saying the market will grow this year, while 40% think it will shrink.   

Opinion is also divided as to when the market will hit the levels it saw before former Chancellor Kwasi Kwarteng’s mini-Budget last September.  

Total equity release lending in the third quarter of 2022 topped £1.7bn, but this fell 17% to £1.4bn in the final three months of last year.   

The survey found that 61% of advisers believe the market will return to pre-fourth quarter 2022 levels this year, although 33% say this will not be before the third quarter.   

The remaining 39% of advisers say the market will not top this mark until 2024 or beyond.  

Canada Life UK head of marketing communications Alice Watson says:  

“It’s clear that the current economic climate isn’t helping consumer confidence and that is being felt across the housing market.   

“The equity release market has weathered previous economic headwinds and provided financial resilience to households across the country. With the right advice, it can offer very flexible ways to meet individual customer needs and will no doubt continue to adapt.”