The number of equity release products on the market has rocketed by 82% year on year from 383 last August to a record high of 698 today, analysis by Moneyfacts.co.uk reveals.

Average equity release rates have increased by 19 basis points from 4.13% to 4.32% over the same period, but Moneyfacts says that this is partly the result of lenders making higher LTVs available, which come at a cost.

Compared to August 2019, when the average equity release rate was 4.92%, today’s figure is 60 basis points lower.

The amount of equity released per year is predicted to increase from £3.7bn in 2021 to £6.4bn over the next decade, according to More2Life.

The maximum LTV available across the market stands at 50%, compared to 49% a year ago, and 46% two years ago.

Moneyfacts finance expert Rachel Springall says the equity release market has been booming and is on track to see further growth.

She says: “Advisers remain optimistic in the sector and lenders have made it clear that they are prepared to compete and tailor their ranges to suit borrower demand.

“There was a mix of changes to products in the lifetime mortgage market last month, but, positively, most lenders made rate reductions to their range, some several times over. 

“A recent study by More2Life revealed that 94% of advisers are confident in the equity release market over the next 12 months and 54% named product innovation as an important factor. 

“The boom in product choice can provide a deal more tailored to someone’s circumstances, and lenders have shown their commitment to adapt their ranges. 

“At present, Just currently has the largest range with over 300 deals, which rose due to its introduction of a fixed early repayment option, which doubled its range. 

“More2Life, Legal & General Home Finance and Pure Retirement are the next brands to offer the largest volumes of options to navigate.

“The busiest month for lifetime mortgage business during Q2 2021, according to the Equity Release Council (ERC), was June, which could be attributed to the rush to make the stamp duty holiday for those borrowers hoping to pass some wealth as an early inheritance onto their children to help them get a step onto the property ladder. 

“Borrowers may also be using property wealth to make home improvements, either by using a drawdown facility as and when they need it, which remains popular with new customers, versus as a lump sum lifetime mortgage. 

“While ERC research suggests drawdown was subdued during the pandemic, returning drawdown activity in Q2 2021 was the strongest recovery segment versus Q2 2020 with customer numbers up by 67%.”