The equity release market grew strongly in the third quarter with a 17% increase in the total value of funds released, putting the market on course for a record-breaking year.
Homeowners released a total of £300 million in the three months to October, as housing market growth boosted confidence in using property wealth to boost retirement income.
The average customer taking out an equity release plan in Q3 released £57,286, a rise of 10% on the same three months last year, according to the latest KRS Equity Release Market Monitor.
Just over £808 million in property wealth has been released so far this year, a 15% rise on the £703 million released at the same stage of 2012.
This puts the market on course for a record year, beating the £1 billion-plus released in 2009.
Total funds released across the market in the three months climbed 17% from £257 million to £300 million, while plan sales grew by 5% to 5,548, up from 5,260.
The strong growth is also being driven by increased awareness of equity release plans as a solution for retirement income planning issues, KRS said.
Around 23% of customers used some or all of the cash to clear mortgage debts underlining how equity release is growing as a solution for the interest-only crisis.
Customers are also using the funds released to improve lifestyles in retirement, with six out of 10 of customers using some or all of the cash to pay for home or garden improvements.
Dean Mirfin, group director at Key Retirement Solutions, said: “The equity release market was already growing strongly before the housing market revival, driven by increased innovation and adviser expertise.
“The property market growth is helping customers realise that housing wealth can play a major role in retirement planning both as a solution for problems such as interest-only and as a source of funds when other retirement income sources are under pressure.”
“The market is on course for a record year with growth built on strong foundations due to its focus on advice and delivering solutions which suit changing lifestyles and reflect customer needs.”
Eight out of 12 UK regions saw increases in the value released, with Northern Ireland virtually doubling while Scotland saw a 68% rise, followed by London with a 51% rise.
The South East, West Midlands, East Midlands and Yorkshire & Humberside all recorded falls but the South East still saw the most released at £71 million.
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