Homeowners are expected to access £3 billion of their housing wealth through equity release this year for the first time ever.
Research by the Equity Release Council reveals some £1.4 billion of lending was conducted in the first half of the year.
That is up from £900,000 in the first six months of 2016.
The latest Equity Release Market Report shows that innovation in the sector has seen the number of products available more than triple to 78 over the past ten years.
Meanwhile, increased competition has seen the average interest rate on products drop to a new low of 5.3 per cent. A year ago the typical rate was 5.96 per cent.
Brits have £2.3tn of wealth tied up in their homes, and many are choosing to tap into it in later life.
Retirement Advantage Equity Release head of marketing Alice Watson says: “Those over the age of 55 increasingly view their housing wealth as something they can draw on to fulfil their desired standard of living, especially in retirement.
“People want to release money in a way that suits them and that they’re comfortable with. The response has been an explosion of equity release product innovation.”
Some 68 percent of equity release products now allow customers to make repayments without charge.
Meanwhile, 45 per cent of products include downsizing protection. This gives customers the opportunity to move to a smaller property and pay off their loan in full after an agreed period.
Other increasingly common features include inheritance protection. This lets borrowers ringfence a guaranteed minimum amount of housing wealth to leave to loved one.
While the average age of equity release customers has remained steady at 71.5, an increasing number of 75 to 84 year olds are starting to unlock the wealth in their home.
The proportion of drawdown customers of this age in the first half of the year climbed to 25.1 per cent, from 23.2 per cent a year ago.
Old Mutual Wealth financial planning expert Rachael Griffin says: “The cost of later life can be steeper than expected, particularly with the cost of care. It’s true that equity release will mean people won’t be able to pass on their housing wealth to their children. But tapping into that wealth way be the only way to avoid leaving you or your loved ones facing steep debts.”
Equity Release Council chairman Nigel Waterson says: “The UK’s older population continues to grow and the shift from final salary to defined contribution pensions will likely result in future retirees facing a greater savings shortfall in later life. It is therefore clear that the role of housing wealth in funding retirement will only become more important in the future.”