Equity release lending rose 21 per cent year-on-year in the third quarter, according to the Equity Release Council.
A total of £452.6m was lent in Q3, which was £68.3m more than the previous quarter – the biggest quarterly rise in 11 years.
The sector is on course for a record year with lending just £220m shy of 2014’s peak of £1.38bn.
Borrowers took out 6,049 new plans in Q3 – a 9 per cent year-on-year increase. The third quarter was the first time in seven years that more than 6,000 new plans were taken out.
ERC chairman Nigel Waterson says: “Appetite among over-55 homeowners for tapping into their housing wealth continues to grow. There is increasing awareness that equity release can offer many benefits in later life by providing people with extra income or the means to meet other costs and expenses.”
The FCA has promised to look more closely at the sector to determine what factors may be holding it back compared with bigger markets like the United States.
Waterson adds: “The months ahead will see important discussions with regulators and government about how to build on this foundation, so that where there is a need, more people can make use of what is often their biggest source of retirement wealth.
“New arrivals in the sector and additions to the product range are helping more people to find options that suit their needs and circumstances. The sector will continue to innovate, as well as maintaining The Council’s standards of financial advice and consumer protections so customers continue to be fully informed and supported in their retirement planning.”
Key Retirement technical director Dean Mirfin says: “The figures announced today show that the sustained growth we have seen throughout 2015 shows little sign of wavering as we enter the final quarter of the year.
“With both HM Treasury and the regulator now throwing the spotlight on ways that consumers can better access and utilise wealth locked up in property, we expect this growth to continue in to 2016 and beyond.”