There has been a big rise in activity in the equity release market based on data from the first quarter of this year.
Owners aged 55 and above released £870m from the value of their homes from January to March 2018 - that’s 120 per cent more than the £394m two years ago in Q1 2016.
The data reveals a similar trend in new customer numbers, which have almost doubled from 5,175 to 10,195 over the same period: a rise of 97 per cent.
There has also been a substantial rise in the number of product options available to consumers - there were 69 in January 2017 but no fewer than 86 in January 2018.
Whilst most product are in either the drawdown or lump sum categories, over two thirds of product options now offer the choice to make ad-hoc, penalty-free voluntary or partial repayments of a loan.
Drawdown products typically see smaller amounts of housing equity withdrawn initially compared with lump sum plans, with an extra amount reserved for future use – thereby limiting the interest owed as it is only charged as funds are withdrawn.
New customers in Q1 2018 agreed drawdown plans with an average initial instalment of £64,797; among the one in three new customers opting for lump sum lifetime mortgages, the average amount was £96,483.
The Equity Release Council, which represents some 200 member firms, says on the basis of the first quarter’s figures, the industry could provide £4 billion of funding for owners by the end of 2018.