Equity release lending surged 17 per cent in the first six months of 2015, new research suggests.
Figures from equity release provider Key Retirement show retired homeowners cashed in £753m from their properties during the period, up from £641m in the first half of 2014.
The total number of equity release plans sold also increased year-on-year, from 10,013 to 11,007.
Mortgage debt, including interest-only loans, is emerging as a “major issue”, Key Retirement warns, with 23 per cent of customers using equity release to pay off home loans. This compares to 20 per cent in the first six months of 2014.
Almost two-thirds (63 per cent) of sales were drawdown plans, while the remaining 37 per cent involved single lump sum payments.
Key Retirement technical director Dean Mirfin says Government plans to hack away at pension tax breaks could further boost the market.
He says: Property wealth is making a massive contribution to retirement planning and the equity release market is growing rapidly in response with double-digit growth.
“Cuts in pension allowances and contribution levels plus the review of pension tax treatment underlines that property investments are major assets which should be considered as part of anyone’s retirement planning.”