The Equity Release Council has called for better information and advice about equity release, after the sector saw total lending exceed £2bn a year for the first time.
Over 2016 the amount lent through equity release increased by £542m, or 34 per cent, to a record total of £2.15bn.
In the final quarter of 2016, £670m was lent, the highest on record and up 51 per cent annually.
From October to December 2016, 8,303 new equity release plans were taken out. That was an increase of 12 per cent from the previous quarter and up 30 per cent year-on-year.
It marked the first time since 2006 that the number of new plans exceeded 8,000 in any single quarter.
Overall new plans taken out in 2016 stood at 27,563, the highest amount since 2008.
Nigel Waterson, chairman of the Equity Release Council, said 2016 had been an "historic year" for the sector, with rapid growth signifying that housing wealth was "becoming an increasingly important focus of retirement planning".
He said the market was becoming more competitive, with more choice and better rates for customers. However, he said more could be done to reach potential customers.
"It is vital that we now build on this momentum to ensure more people can access the necessary information and advice to make informed choices about how best to use their various assets in later life.
"With increased recognition of the role housing wealth can play, we look forward to working closely alongside government, regulators and industry to help support the UK’s ageing population."
Mr Waterson's comments come a day after equity release brokerage firm Key Retirement predicted 2017 would see even greater growth in lending.
The firm's technical director Dean Mirfin said this would likely be augmented as the first endowment mortgages sold in the 1990s and early 2000s reach maturity.
He warned many of those holding interest only mortgages, generally of retirement age, would struggle to repay the capital, forcing many to resort to selling their home.
This, he said, could result in a massive surge in demand for equity release, pushing growth in the sector far above the current 2017 projections that it will grow by 19 per cent.
Key Retirement also published a breakdown of what equity release was being spent on, with home improvements and credit card debt high on the list.
james.fernyhough@ft.com
