The Equity Release Council has announced that the equity release market has recorded its busiest start to a year on record.
During the first quarter of 2019, £936m of equity was released, an 8 per cent rise year-on-year.
Further data shows that the total number of new plans agreed between January and March rose 10 per cent to reach 20,397.
According to the ERC, 10,854 plans were agreed in the same time frame, a 6 per cent rise on Q1 2018.
However, the number of average new lump sum lifetime mortgages agreed in Q1 was just 1 per cent higher year-on-year, totalling £97,763.
Meanwhile, new drawdown customers agreed a first instalment of £62,416 on average, a 4 per cent fall from Q1 2018.
The council says that drawdown lifetime mortgages continued to be the most popular option for the majority of new customers, with 64 per cent opting for this. This was followed by lump sum lifetime mortgages, at 36 per cent.
The ERC also conducted a survey questioning the reasoning behind looking to release equity across the age groups, 55 to 64, 65 to 74, and 75 and over.
Within the 55 to 64 category the top reason was ‘paying of an interest-only mortgage’ at 74 per cent answering in this way. This was followed by ‘paying off unsecured debt’, at 60 per cent.
Meanwhile, in the 65 to 74 category the top spot was taken by ‘paying for home improvements’ at 69 per cent. Closely followed by ‘supplementing retirement or pension income to meet general living costs’ at 68 per cent.
Lastly, the 75 and over category saw ‘supplementing retirement/pension income to meet general living costs’ and ’paying for home improvements’ the joint highest, at 69 per cent.
Equity Release Council chairman David Burrowes comments: “Demand for equity release is not only growing but broadening, with property wealth being used to meet a growing range of needs in later life.
“Customers now have access to hundreds of product options combining various features to suit different individual circumstances – all underpinned by product safeguards, such as the guaranteed right to remain in their homes with no risk of repossession for missing repayments.
“The recent addition of regular income-paying products has added to a varied product range offering monthly interest payments, ad-hoc lump sum repayments, downsizing protection and inheritance guarantees.”
More 2 life corporate marketing director Stuart Wilson says: “It is clear that the appetite for equity release among older homeowners is growing as they look to unlock the wealth tied up in their homes to meet a variety of needs.
“With an ageing population and a need for retirees to fund a long and happy retirement, the demand for equity release is only going to increase further.
“Product innovations such as the flexibility to manage debt, through regular capital or interest repayments and inheritance protection have made these products more attractive to a wider range of older homeowners looking to supplement their income in later life.”
Canada Life Home Finance head of marketing and communications Alice Watson adds: “It is a very welcome sign that equity release continues to scale new heights, with the sector registering record first quarter lending for the sixth year in a row.
“However, there is still plenty of work to be done to demystify equity release for homeowners and overcome common misconceptions, as well as to continue product innovation to meet customers changing needs.”