The Equity Release Council has announced that a record number of new plans were agreed to in the last three months of 2018 – 12,891.
This means that the total number of new plans agreed for the year came to 46,397, a 25 per cent increase year-on-year.
During 2018 as a whole, the council says that 82,791 customers released equity from their homes.
Lending activity grew for the seventh consecutive year in 2018, with total lending reaching £3.94bn, a 29 per cent year-on-year increase.
The Equity Release Council states that £1.08bn of housing wealth was unlocked in Q4 2018, with older homeowners collectively drawing on £136 of housing wealth every second.
Product choice has also increased, the report says. As of August 2018, 139 product options were available to customers, more than double the 58 seen in 2016, and up from 24 in 2007.
The average amount withdrawn by homeowners has remained steady, however – the average first instalment of a drawdown lifetime mortgage coming to £63,530 compared to £62,359 in the year previous.
The average new lump sum lifetime mortgage in the last quarter of 2018 was £96,515, down from £101,913 in Q4 2017.
The firm outlines that drawdown products were by chosen by 65 per cent of new customers during Q4, while 35 per cent opted for lump sum products.
The Equity Release Council chairman David Burrowes says: “The equity release market continues to experience sustained growth as older homeowners are realising that property wealth can play a crucial role in supporting their retirement alongside pensions, savings and other assets.
“With a growing choice of products and features on offer, the market is maturing and adapting to offer a new level of flexibility to suit a range of financial needs and ambitions, from funding care costs to helping children to buy their first home.
“Equity release now plays a pivotal social role and the Equity Release Council will continue to ensure that products are underpinned by robust consumer safeguards.”
More 2 Life chief executive Dave Harris adds: “With the equity release market ending on another record-breaking year, it is yet another sign of a burgeoning industry.
“With more lenders and product innovation in the sector, it’s clear this has also resulted in an increasing number of older homeowners using equity in their homes to boost their finances.
“Through further funding and product innovation equity release is in a prime position to help these homeowners who require access to extra cash to supplement their income in later life.”
Key chief executive Will Hale comments: “Over the last 12 months we have seen the equity release market grow from strength to strength, despite uncertainty in the wider economy.
“While a variety of factors are driving the market, our own analysis suggests that equity release is appealing to an ever more diverse profile of customers.
“This is evidenced by the fact that increasingly customers are choosing to gift some of the equity they take out.”