The value of equity release lending in Q2 rose 27 per cent year-on-year to £701m, according to new figures from the Equity Release Council.
This figure is the highest for any quarter since the ERC started keeping figures in 2002.
The trade body says 8,454 new plans were agreed in Q2 2017, up by 27 per cent on Q2 2016.
Second quarter lending activity has now risen 82 per cent in the last two years, from £384m in Q2 2015.
ERC members lent to16,000 equity release customers in the period.
Of these, over half (8,454) took out new equity release plans, 27 per cent higher than the 6,671 new plans recorded in Q2 2016.
Drawdown lifetime mortgages remained the most popular product in the market in Q2 2017.
Almost seven in ten (68 per cent) of new customers opted for drawdown in the quarter, up from 67 per cent in Q2 2016 and 65 per cent in Q2 2015.
Lump sum products made up 32 per cent of new plans agreed and 37 per cent of total lending in the second quarter.
The value of lump sum lending rose by 25 per cent over the last 12 months, from £209m in Q2 2016 to £262m in Q2 2017.
ERC chairman Nigel Waterson says: “Continued rapid growth in housing wealth withdrawals reflects an increasing appetite among older consumers to utilise bricks and mortar for funding retirements.
“The retirement income pressures facing many savers in the era of defined contribution pensions and low interest rates are encouraging homeowners to consider a wider range of financial options.
“Housing wealth – often people’s most valuable asset – is an important part of bridging the gap between the comfortable retirement people want and the retirement they can afford from their savings.”
Key Retirement technical director Dean Mirfin says the market growth is impressive but would be higher if lenders did a better job of flagging up equity release to their maturing interest-only customers.
He says: “There are an estimated 10,000 borrowers this year alone who have either a shortfall or no way to repay their loan and a significant number are going to have a problem.
“Most of the interest-only customers approaching us are finding us themselves. Some lenders are on board with offering wider solutions including equity release but this is still in the minority, and we hope more lenders start to do more.”