The number of equity release products available on the market grew by 100 in the second half of 2020, reaching 488 by the year’s end, says the Equity Release Council in its Spring 2021 market report.

This compares to the 202 products two years previously, says the ERC.

Additionally, the number of retirement interest-only products available reached 100 for the first time ever at the end of 2020.

While the above was happening, the total value of UK private property rose to £6tn – or £4.6tn with mortgage debt discounted. This, too, is a first.

It means that the average property owner in the UK held £189,549 of equity with an average loan of £61,951. And the average LTV of a UK property was 24.6 per cent, which is the lowest seen since before the financial crisis of 2008.

The ERC’s report also shows that the average lifetime mortgage product rate was 3.95 per cent at the end of last year, with 58 per cent of the products on the market at 4 per cent or lower and 26 per cent of products offering rates of 3 per cent or less.

In the second half of last year, there was a drop in returning drawdown activity, numbering 13,489 customers, which is the lowest seen since the second half of 2017.

Further advance activity moved positively though, going from 1,669 plans agreed in the first half of 2020 to 2,081 in the second half. This was still some way off the 2,248 further advances agreed in the second half of 2019, however.

The ERC adds that across new and returning customers, average amounts of released wealth “remained relatively stable” – £3.89bn was accessed during the course of 2020 compared to £4.2bn in 2019.

ERC chairman David Burrowes says: “After the unprecedented upheaval of early 2020, the equity release market showed signs of recovery as households and businesses remained resilient against a challenging backdrop.

“Property wealth ranks second only to pensions in terms of its importance to household finances across the country. The transformation of later life mortgage products in recent years has given people more opportunities to access property wealth at affordable rates.”

Key chief executive Will Hale adds: “The story around product evolution is important but the bigger picture is the changing nature of demand and the growing acceptance of the central role that property wealth has to play in helping people navigate their way through later life.

“Equity release is increasingly being used to support families and to improve financial flexibility, with our own data showing 29 per cent of customers’ refinanced a mortgage while 22 per cent gifted some or all of the money they released.”

And HUB Financial Solutions managing director Simon Gray comments: “Our recent analysis shows retired households with the lowest incomes have among the highest rates of home ownership so equity release will likely provide a core top-up retirement income stream for many of these people to ensure they can achieve a better later life.”