This was down 2% from Q2 (£1.17bn), but up 19% (£963m) compared with Q3 2020.
However, the latest figures mean lending to new and existing customers has now exceeded £1bn for four successive quarters for the first time on record.
The ERC said has been helped by a backlog of demand from successive lockdowns, the strong performance of the property market and further improvements in equity release product availability.
A total of 19,300 new and returning customers were served between July and September.
Customers agreed 10,023 new equity release plans in Q3 2021, up from 9,898 in the previous quarter.
However, this was 3% lower than a year earlier, when activity in Q3 2020 was driven up by a backlog from the first COVID-19 lockdown.
Drawdown lifetime mortgages remained the most popular product category, attracting 57% of new customers in Q3 2021 compared with 55% in Q2, while 47% chose a lump sum lifetime mortgage.
September was the second busiest month of the year to date for new plans agreed (3,520), compared with 3,727 in March 2021 ahead of the original stamp duty holiday deadline.
August was the second quietest month of the year so far with 3,127 new plans agreed, compared with 3,003 in February.
The average first instalment of a new drawdown lifetime mortgage was £86,337, almost identical to Q2 (£86,349), with an additional £34,406 held in reserve, compared to £34,310 in Q2.
The average new lump sum lifetime mortgage reduced by 6% from Q2 to £121,464 as the stamp duty holiday threshold dropped from £500,000 to £250,000 after 30 June.
Larger loans during Q2 were likely to be influenced by customers’ desire to gift money to support family members’ house purchases or use equity release to make their own purchase before the deadline arrived.
This latest average lump sum plan remained higher than any quarter prior to 2021 but is the lowest average so far this year.
The long-term rise is likely to be influenced by rising property prices and more affluent customers using equity release products.
The ERC research shows the average house price among new lump sum customers was 17% higher in H1 this year than H1 2020.
Q3 2021 saw 8,002 existing customers with drawdown lifetime mortgages return to make a withdrawal from their agreed reserves.
This was the second highest figure since the pandemic broke out, although down from 9,382 during Q2, when the ERC said the stamp duty deadline may have incentivised gifting from drawdown reserves to support house purchases.
Further advances were agreed for 1,275 existing plans between July and September 2021, as customers sought to unlock additional property wealth.
This was the highest level recorded in any quarter and was likely influenced by people looking to capitalise on the increase in property prices over the last 12 months, which has exceeded the average interest rate on equity release products in most regions of the country.
David Burrowes, chairman of the Equity Release Council, said: “The equity release market has been a steady ship in turbulent times with activity broadly stable now for four successive quarters.
“The inevitable pandemic slowdown has been followed by the gradual return of confidence, helped by the robust performance of the wider property market.
“While annual activity has hovered close to £4bn since 2018, the market hasn’t stood still and the available product range has more than doubled since then.
“Homeowners in need of extra funds for later life are increasingly look to equity release as a positive step, in the right circumstances, to benefit from a source of wealth they have built up over many decades.
“The stamp duty holiday inevitably impacted consumer behaviour over the summer and into autumn, with average loan sizes and drawdown activity fluctuating.
“Looking ahead, the ability to gift money to family members and share the proceeds of long-term house price growth is likely to remain an attractive option.
“Equity release can both help to close the financial gap between generations and allow people in later life to experience and enjoy the benefits of providing a living inheritance.”
Claire Singleton, chief executive of Legal & General Home Finance, said: “The market is set to provide older homeowners with access to more than £4bn of property wealth for the first time by the end of this year, largely due to the stamp duty holiday and the effects of the pandemic property boom.
“Supported by low interest rates, and an expanding market, lifetime mortgage products have grown in popularity as homeowners look to access additional wealth, either for their own retirement needs or to support loved ones.
“Flexibility and an increasing range of products, including the option to pay interest, mean attitudes towards equity release are changing.
“With property continuing to rise in value, many people have seen their home emerge as their most significant asset, moving lifetime mortgages away from a specialist product to an essential element of at-retirement planning.”
