Bower Retirement Services research has suggested that up to one in five equity release customers are receiving lower than expected property valuations when they take out plans.

Its study indicates advisers estimate on average 19% of customers over value their homes before starting an application highlighting the need for expert specialist advice when taking out plans.

Bower’s quarterly Adviser Tracker Research identified the issue of lower-than-expected valuations which is increasingly being experienced by advisers despite the average value of homes owned by customers increasing.

Around 70% of advisers questioned say they have seen increases in the average value of homes owned by customers they deal with and 21% are seeing substantial increases in property values.

The Adviser Tracker found 14% of advisers say the average house price of customers they deal with is £500,000 or more underlining the expansion of the equity release market.

Andrea Rozario, chief corporate officer at Bower Retirement Services, said: “Lower than expected valuations are an emerging issue for the equity release market with many customers over-estimating their property’s worth.

“That can come as a shock when people are making the decision to access their property wealth as part of retirement planning underlining the need for specialist advice and service throughout the equity release process.

“That becomes even more important as average property values of equity release customers are continuing to rise with increasing number of customers with houses worth £500,000 or more recognising how property wealth can help with retirement planning.”

Bower’s research shows advisers expect continuing growth in the equity release market during 2016 but there is confusion about the possible impact of regulatory changes from the Financial Conduct Authority review of the market and the Financial Advice Market Review (FAMR).

Around 35% of advisers say they are unsure if the FAMR will be positive for the equity release market while 36% are not convinced the FCA review looking at barriers to entry and the market in general will be positive.