Retirees are extracting £5 million pounds per day from the equity built up in their homes to support themselves at home or in care.
Equity release lending in the three months to September increased by £68.3m compared with the previous quarter as more homeowners over the age of 55 make use of their housing wealth to support their finances in later life.
Industry figures from the Equity Release Council show rising demand in Q3 as the market registered its fastest annual growth rates of 2015 in terms of lending and the number of plans agreed.
Total Q3 lending rose 21% year-on-year, compared with 18% annual growth in Q2 and 3% in Q1, to reach £452.6m, the equivalent of £5m per day.
There were 6,049 new plans taken out in Q3 2015, representing a 12% increase on Q2 and the first time this measure has exceeded 6,000 since Q4 2008. The volume of new plans in Q3 was up 9% year-on-year: the strongest figure of 2015 to date, compared with 3% annual growth in Q2 and 2% in Q1.
Growing demand for equity release to help boost retirement incomes and meet later life expenses means lending for Q1-Q3 2015 already exceeds the 2013 annual total (£1.16bn vs £1.07bn), and is within £220m of the record annual total of 2014 (£1.38bn).
“Appetite among over-55 homeowners for tapping into their housing wealth continues to grow. There is increasing awareness that equity release can offer many benefits in later life by providing people with extra income or the means to meet other costs and expenses,” said Nigel Waterson, chairman of the Equity Release Council.
“The months ahead will see important discussions with regulators and government about how to build on this foundation, so that where there is a need, more people can make use of what is often their biggest source of retirement wealth,” he added.