Equity release lending to homeowners over the age of 55 totalled £384.3m in Q2 2015, the largest amount for any quarter since records began in 2002.
The figures released by the Equity Release Council surpassed the previous high of £375.4m reached in Q3 2014.
According to the data, the value of housing wealth released in Q2 2015 was up 18 per cent both on the previous quarter and last year’s Q2 total of £325.6m.
Homeowners aged 55 and over effectively withdrew £4.2m of housing wealth every day from April to June.
Nigel Waterson, chairman of the Equity Release Council, said: “The last three months have been a landmark period for UK pensioners and those approaching retirement, and equity release activity continues to grow amid a sea of change.
“There is no doubt the pension freedoms have created more options for people to consider, but the appeal of tapping into housing wealth is on the rise as older consumers seek to make use of all the assets at their disposal.
“Doom and gloom often surrounds discussions on retirement income, but while contributions to pension pots remain low, an entire generation of homeowners have been paying into property their whole lives: making it an asset that can transform their financial options beyond the age of 55.”
There were 5,414 new equity release customers in Q2 2015, an 11 per cent increase on the last quarter, pushing the total number of new customers past 10,000 for the first six months of 2015.
Helen Davies, head of implementation at Partnership, said “These new market figures from the Equity Release Council suggest that the market is continuing to go from strength to strength.
“While equity release should never replace adequate pension provision, considering how you can use your housing wealth in retirement should be part of people’s later life planning.
“Whether it is used to repay a mortgage, to fund care or simply improve someone’s standard of living, it can make a big difference to people’s quality of life.”
The value of lending, via lump sum lifetime mortgages, has also increased by 10 per cent year-on-year in H1 2015 to reach £285.3m.
This is the highest total for lump sum activity in the first half of any year since H1 2007 when the value hit £355.9m.
Dean Mirfin, technical director at Key Retirement said: “The increasing average loan amount reflects the fact that pensioner property values continue to grow, while the average loan-to-value remains stable, showing borrowers in the main remain sensible by not stretching their LTV to the maximums available.”
Adviser view
Mel Kenny, a financial adviser with London-based Radcliffe & Newlands, said: “More and more people are reaching the age of 70 or 75 and finding their interest-only mortgages are coming to an end and lenders are unwilling to extend the terms, so for some there is nowhere else to turn but to enter equity release.
“That represents quite a few enquiries around equity release.”
