For a number of years the lifetime mortgage and home reversion markets have been predicted to soar but, while there has been limited year-on-year growth, it still retains the appearance of being slowly awakening. However it is a potential giant.

The potential demand is obvious yet largely untapped: inadequate pension provision, low annuity rates, increasing life expectancy together with high levels of equity built up in property over many years.

At first glance you would assume that the main demand would be to supplement income but the majority of analysis has pinpointed that equity release is mainly used to fund lifestyle aspirations - things like a new car, exotic holiday or home improvements. Other demands encompass things like inheritance tax planning, nursing care, gifting to children/grandchildren and debt consolidation. I’m convinced that the latter is going to become a growing motive particularly with the increasing trend to take out interest-only mortgages without arranging any appreciable repayment strategy.

And we now have the credit crunch which means that loans are likely to be harder to obtain in 2008. House prices also give the appearance of entering a bear market with predictions as to the extent varying wildly with some suggesting a fall of as much as 30%.

Meanwhile the equity release providers are expanding in both number and repertoire. Coventry Building Society has joined the trade body (SHIP - Safe Home Income Plans) and will offer products shortly. Dunfermline Building Society is also rumoured to be about to put its toe in the water.

In terms of product, drawdowns are very much in vogue whereby interest is only charged on the amounts actually taken. Other innovations of note include the acceptance of buy-to-let or holiday home properties and enhanced offerings for impaired lives.

For the provider each equity release contract is potentially long term and of unknown duration so it is unlikely to represent a get rich quick option. Given that sub prime lending is no longer particularly attractive from a lender perspective, I would expect more lenders to be seriously contemplating offering lifetime mortgages.

2008 could be the year when equity release finally enters the mainstream as part of retirement planning.