Retired homeowners withdrew over £6.8m of property wealth a day, as the equity release market surged to a new high, according to analysis from over-55s retirement specialist Key Retirement.
Total sales for the first nine months of the year are already at 92 per cent of the total achieved in the whole of 2015, which was an all time high, the firm's equity release market monitor shows.
Over £1.58bn of property wealth has been released in the nine months to October, compared with £1.71bn across 2015, with the past three months recording strong growth.
Customers released a total of £633.8m of property wealth in the third quarter, with 8,348 customers taking out plans, compared with £470.9m released in the same period of 2015 by 6,297 customers.
Additionally, the number of homeowners using property wealth to spend in retirement increased 33 per cent in the three months to 30 September compared with the same period last year, while the total amount released grew by 35 per cent.
Homeowners gained an average £75,900 each by using equity release, according to Key Retirement's figures.
The findings show wide variations around the country, with Londoners releasing £135,886 compared with £44,830 in Northern Ireland.
Around 82 per cent of Key Retirement's customers used some or all of the cash for home or garden improvements compared with 61 per cent in the same period last year.
A total of 41 per cent cleared credit card and loan debts compared with 30 per cent last year. Around a third - 34 per cent - funded holidays in the past three months while 21 per cent paid off mortgages.
Dean Mirfin, technical director at Key Retirement said: “The equity release market has already almost matched the record performance of 2015 in just nine months highlighting how property wealth is enhancing retirement planning as other retirement income solutions are squeezed by historically low gilt and interest rates.
“The growth in the average amount released by retired homeowners is making a major difference to lifestyles with the detailed breakdown showing how most are using the cash to improve their homes while also being able to pay off debts and boost income.
“The market is on course for another record year with rate cuts for loans and new providers entering the market providing further momentum. The results also show that demand for tapping into housing equity is very much increasing throughout the UK with most regions recording record growth in plan numbers and total lending.”
Nick Green, mortgage broker at Coventry-based Alternative Estates & Financial Services Limited said: "This is good news.
"Equity release providers need to promote equity release more though, since it still has a bad reputation. People do not quite understand the product because the lenders do not get behind it - you need more high street names to promote it."
