Homeowners took out 13,452 new equity release plans in the third quarter with total lending topping a record £1.7bn, according to the Equity Release Council.
The body says this type of loan, among property owners aged 55 or over, topped 13,000 for the first time, coming in 8% higher than the previous quarter.
It adds that the market also included 9,648 returning customers and 2,419 further agreed advances, making a total of 25,519 customers active between July and September.
New customer numbers lifted by 34% from a year ago, with lending to new and returning customers growing by 49% over the same timeframe.
New plan sizes were largely stable at an average of £133,770 for lump sum lifetime mortgages, edging up by 1% from the second quarter, while new drawdown plans dipped by 3% to £88,340 for the initial withdrawal.
However, the body points out that loan activity fell by 10% in the final month of the period “as September saw challenging economic conditions and product prices rise”, marked by the government’s mini-budget.
Key chief executive Will Hale says: “Today’s figures from the Equity Release Council highlight a growing and robust sector. However, as with other parts of the mortgage market, recent political uncertainty has impacted rates and product availability which means that the final three months of the year will likely look quite different to the first three quarters.
“While the appointment of the new Prime Minister looks set to steady the markets, there remain challenges ahead and customers considering borrowing in or into retirement must seek specialist advice and consider all their options.”
Legal & General Home Finance chief executive Craig Brown adds: “Demand for equity release has returned to pre-pandemic levels, as the nation looks to the value of their homes to support strategic later life planning needs.
“Although there may be a slowdown in house price growth, property prices are still at an all-time high and many homeowners have built up a significant amount of equity in their homes and see their home as a retirement asset.
“As we look to the next three months, we expect that gifting will remain a popular use of equity release. We could also see customers looking to access property wealth to finance energy efficiency improvements to make homes more sustainable for the long term. As ever though, it is not a quick fix, but an important product to be considered as part of a wider approach to retirement planning.”
Equity Release Council chair David Burrowes says: “The summer months have seen the equity release market resume its pre-pandemic growth trajectory, with extra protections having been added in the intervening years so all new customers can make voluntary repayments when they can afford to and reduce their overall costs.
“Equity release is not an overnight purchase, and the desire to secure lower interest rates before anticipated rises is likely to have influenced customers’ timings as they completed deals from earlier in the year.”
