The equity release market has had its busiest start to any year on record, according to the latest figures from the Equity Release Council.
Figures in the trade body's quarterly report, published today (April 29), showed the number of consumers releasing equity from their property between January and March increased by 10 per cent on the same period the year before.
These 20,397 customers released £936m of property wealth, an increase of 8 per cent year-on-year, and the number of consumers taking out new plans — 10,854 in Q1 2019 — was up 6 per cent from 10,195 in Q1 of 2018.
Across all three measures the level of activity was the highest seen to date for the first quarter of any year since records began in 1991, following a bumper year for the market throughout 2018.
Despite the rise in market activity, the average withdrawal through lump sum equity release products remained steady, increasing by only 1 per cent to £97,763.
By comparison, those opting for a monthly payment — a drawdown lifetime mortgage — decided to withdraw less on average, down 4 per cent to £62,416.
Drawdown lifetime mortgages remained the preferred option for the majority of new customers looking to unlock equity, as 64 per cent opted for this category compared to 36 per cent choosing a lump sum.
This was a slight shift compared with the year before when 32 per cent of new plans agreed were lump sum and 68 per cent were drawdown mortgages.
For customers aged 65 to 74, which is the average age a consumer released equity, the key motives for taking out a policy were identified as funding home improvements, supplementing retirement income and helping family and friends with their own house moves.
Among the 55 to 64 age group, paying off existing mortgages and unsecured debt were the key drivers of the activity.
Commenting on the findings, David Burrowes, chairman of the Equity Release Council, said: "Demand for equity release is not only growing but broadening, with property wealth being used to meet a growing range of needs in later life.
"Today’s competitive market is helping thousands of homeowners to make flexible use of their property assets to tackle a host of financial challenges, not just on their own behalf but also on behalf of family members."
Mr Burrowes added customers now had access to hundreds of product options which had different features to suit different individual circumstances and said the recent addition of a drawdown mortgage had added to the product range.
Will Hale, chief executive at Key, said: "[These figures] show how well-established the growth trend is across the market. It also supports our own experience of the fast-developing awareness among customers and their increasing demand for specialist advice and support with accessing property wealth.
"The size of average advances is stable and expansion is being driven by more customers making use of the wealth they have accumulated in their houses to meet a wider range of financial needs.