Cuts in equity release rates are behind a rise in inquiries about switching plans from existing customers, according to new research from Bower Retirement.

Its study found 53% of advisers have seen a rise in clients looking to move their existing deal to a lower rate with 12% reporting a substantial increase in interest from customers looking for lower rates.

Bower Retirement found that increased competition among existing lenders and new companies entering the growing market have meant rates falling to new lows: average rates are currently around 5.66% and have fallen by nearly 1% in the past three years while the number of plans available has nearly trebled over the same period.

At present, providers have historically low rates with some lenders offering deals below 4.3%, potentially enabling existing customers to move their plan.

However, Bower’s study found advisers believe the market needs more competition if it is to maintain recent strong growth; around 78% questioned said new lenders coming into the market would be the best way to maintain momentum.

Advisers also want to see more innovation with 34% calling for more retirement lending while the same number said further rate cuts would be the best way to continue market growth; the Equity Release Council has forecast the market will exceed £2 billion for the first time in 2016.

“Increased competition in the market with new lenders such as Legal & General and OneFamily launching has meant rates have fallen significantly as the market has grown,” said Andrea Rozario, chief corporate officer at Bower Retirement

“That is reflected in the growing interest in switching plans but it is vital that customers considering moving get independent advice as any savings from lower rates need to be balanced against any early redemption charges or other costs.

“New lenders coming into the market demonstrate the growing demand there is but it is also clear advisers want to see more providers launching this year to further enhance competition.”