Equity release lending passed £3bn for the first time in 2017, up 42 per cent on 2016, according to the Equity Release Council.
It was a record quarter for equity release activity in the fourth quarter of 2017 that pushed annual lending growth in the sector to its highest level since 2002.
The total amount of housing wealth unlocked by over-55 homeowners reached £3.06bn in 2017 – the first time it has exceeded £3bn in a single year.
Lending via equity release plans in the fourth quarter of 2017 amounted to over £838m, the highest level on record for any single quarter.
The final three months of 2017 also saw an unprecedented number of new equity release customers, exceeding 10,000 for the first time in a single quarter (10,327).
This represented a 4 per cent increase from 9,905 in the third quarter of 2017 and almost a quarter (24 per cent) compared to 8,303 new customers in the final three months of 2016.
These increases meant the total number of new equity release plans agreed in 2017 was up 34 per cent on 2016 from 27,563 to 37,037: the highest total on record and the biggest percentage rise since 2003.
Overall, the sector supported almost 67,000 customers during 2017, with 25,794 existing drawdown lifetime mortgage customers returning to dip into agreed reserves, and 3,867 existing customers agreeing further advances on either lump sum, drawdown or home reversion plans.
David Burrowes, chairman of the Equity Release Council, said the record-breaking demand for equity release over the past year is testament to the fact more consumers are changing the way they plan financially for retirement.
He said: "The evolving mindset of consumers is helped by the flexibility to use housing wealth for a range of purposes, and the rigorous safeguards and customer protections in place across the market."
Alice Watson, head of marketing at Retirement Advantage Equity Release, said equity release is flourishing, driven by a recognition that property has a critical role to play in boosting retirement income.
She said: "If growth continues at this rate, we have a real chance of seeing the first billion-pound quarter this year.
“We shouldn’t be surprised. For many people at or approaching retirement, the amount of wealth they have in their property outweighs the amount they have in their pension or other savings.
"As taking a holistic view of all assets becomes the norm, more people are considering how they can draw on property to help them live the retirement lifestyles they want.
“The equity release industry can be proud of these figures, which are tribute to the levels of innovation we saw in 2017.
"The challenge now is to maintain that innovation, exploring new markets like buy-to-let, and doing all we can to help more advisers become equity release qualified.
"If we can do that, I’m confident we can repeat these successes again in 2018."