Homeowners aged 55 plus released £473m of housing wealth in the first six months of the year, up around 12 per cent from £423.9m between January and June last year.
Having dipped in value after the recession, data for the first half of 2013 showed the equity release market has now grown by 29 per cent in the last two years.
This improvement has been fuelled by a strong second quarter of 2013, which saw £239.2m worth of equity release plans agreed. This was up by 2 per cent from the first quarter (£233.8m) and 6 per cent on the equivalent period in 2012.
Customer numbers grew by 6 per cent in the second quarter, meaning 14 per cent more people took out an equity release product in the first half of 2013 than in the first half of 2011.
Despite losing nearly 1 per cent market share between the first and second quarters, lump sum mortgages were chosen by 37 per cent of consumers in 2013 to date compared with 32 per cent during the first six months of 2012.
The typical amount of equity released fell slightly from the first quarter of the year, down from £55,985 to £54,196 in the second quarter. However, this was still the second largest average for any quarter since 2002.
Consumers continued to look to IFAs in greater numbers during the first half of 2013, with the proportion using an independent adviser rising from 90 per cent to 93 per cent year on year in the first six months of 2013.
Nigel Waterson, chairman of the Equity Release Council, said: “These figures show an extremely strong first half of the year for the equity release industry. If growth continues at its current rate then the annual market value could exceed £1bn for the first time since 2008.
“As a nation we are becoming more aware of the shortfalls in pension income, with an increasing number of people finding they are unable to save sufficient funds for the duration of their retirement.
“This situation is made worse by the fact that the growing cost of day-to-day living shows no sign of leveling out or subsiding anytime soon.”
Earlier this week, FTAdviser reported that an expected increase in the number of advisers using equity release had failed to materialise due to concerns over finding clients.
