Equity release lending jumped 11 per cent year-on-year to £710m in the first half of 2015, according to the Equity Release Council.
The report shows equity release lending increased from £641m in the same period of 2014, the highest amount lent in the first half of the year since 2002.
Around 10,000 new plans have been agreed in each of the last four half-year periods. However, average equity rates fell below 6 per cent for the first time.
In July the average was 5.97 per cent – 0.55 per cent lower than at the end of 2014 – which represents the biggest fall across all mainstream borrowing, apart from personal loans.
The report also shows how drawdown products have overtaken lump sums in popularity. In the first half of 2015 drawdown made up 65 per cent of equity release products, while 35 per cent of customers choose a lump sum, and 1 per cent took out a home reversion plan.
By comparison, in the same period in 2007 – the busiest on record – 44 per cent of products were drawdown, 51 per cent lump sum and 5 per cent home reversion.
Despite house prices rising 4 per cent year-on-year, the average first withdrawal from a drawdown plan fell 2 per cent, from £47,830 to £46,958.
Equity Release Council chairman Nigel Waterson says: “With drawdown products having emerged as the majority preference, more recent innovations mean customers can opt for products that protect a minimum inheritance or enable monthly interest payments to begin with. The prospect of more new providers and different funding options emerging will build on this and help the market to satisfy wider demand.”