Equity release was the fastest-growing section of the market in 2016 in terms of customer numbers, the Equity Release Council says.
The volume of lifetime mortgage plans grew by 22 per cent in 2016 to hit 27,534, according to the trade body’s Equity Release Market Report.
Meanwhile the second fastest growing mortgage segment – buy-to-let remortgaging – saw an increase of 16 per cent, having recorded the biggest annual growth rate in the previous three years.
Residential remortgaging numbers rose 16 per cent last year, and first-time buyer numbers were up by 8 per cent.
However, home mover mortgagor levels fell 2 per cent and buy-to-let purchase mortgages fell by 13 per cent.
In 2006 there was one new lifetime mortgage agreed for every 27 home mover mortgages and 43 remortgages.
By 2016 this had reduced to one lifetime mortgage for every 13 home movers and 14 remortgages, respectively.
Drawdown mortgage products continued to be the most popular type of equity release plan in 2016.
Around 65 per cent of new customers chose drawdown, with compared to 35 per cent opting for lump sum mortgages.
Over the course of the year the proportion of lump sum customers increased slightly, from 33 per cent in H1 to 37 per cent in H2.
Drawdown figures fell from 67 per cent in 2016.
The average age of equity release customers increased slightly in H2 2016, rising from 69.9 in H1 to 70.1 years old.
The most popular age bracket to take out equity release products remained between 65 and 74.
The Equity Release Council chairman Nigel Waterson says: “The sector is becoming increasingly mainstream amid growing appetite from older homeowners, reflected by the fact that lifetime products were the fastest growing segment of the mortgage market last year.
“Older homeowners are increasingly realising that there are a number of potential uses for their housing wealth beyond supplementing their retirement income, including re-investing in their homes and helping younger family members by providing a living inheritance.”
More 2 Life channel marketing director Stuart Wilson says: “The interest only issue has lit a fire under the retirement lending sector, with some 40,000 interest only mortgages that are due to mature in 2017/2018 – which can potentially be managed with the help of equity release.
“Today’s equity release customer is expecting more from the market and the time is now for us to respond with modern lending features. The era of rigid lifetime mortgages needs to be left in the past.”