UK homeowners released 50 per cent more equity from their properties over the past three months, according to Responsible Equity Release.
The 49.6 per cent increase on the previous quarter (March to May) came as homeowners looked to use their properties to boost pension income and pay off mortgages, the provider said.
An average of more than £100,000-worth of equity per plan was released over the past three months, with an average of £74,116 released immediately and an average additional borrowing facility of £35,514 to draw from as and when the money is needed.
The number of UK homeowners releasing equity from their homes climbed by 28.4 per cent quarter-on-quarter and 86.6 per cent on the same quarter in 2016.
Homeowners in the north-west released more than double (102.3 per cent) the amount of equity in August compared to July, while those in the east of England released 55.3 per cent more.
London saw a 17.2 per cent drop in the total amount of equity released by homeowners in August compared with July, with an average amount of £174,489 last month.
The fall was probably due to the capital’s cooling property market, which has performed worse than almost any other regional market in the UK over the past few months.
Steve Wilkie, managing director of Responsible Equity Release, said: “The Bank of England has indicated that an interest rate rise is on the horizon, but a small increase in the base rate is unlikely to help Britain’s retirees who have suffered more than most during the past eight years of record low rates.
“Whether rates will rise in the near future is anyone’s guess, and many people have decided there’s no point in waiting for that day. Instead, they have taken matters into their own hands and are using their one major asset, their property, to boost flagging income.”
Tracey Lucas, equity release adviser at Suffolk-based Needham Mortgage Centre, said she thought the current equity release boom was just the tip of the iceberg.
She said: “The people who are coming up to retirement, their pension planning is not adequate, and there will be more and more people in that situation.
"Even the government is saying people should be accessing wealth in their property.
“The newer contracts are more flexible and a lot more suited to a life situation than they used to be.
"Also, there are people coming to the end of interest-only mortgages and who don’t want to move house, people finding it hard to make ends meet on a state pension, people who want to give a gift to their families and those who just want to spend the money.
“People’s attitudes are slowly changing – there is no stigma attached to it now. People are saying ‘it’s my money; I want to spend it’.”