Record amounts of property wealth were accessed through equity release products across 2021, according to the Equity Release Council.

The trade body said that the sector has now returned to growth for the first time since 2018.

Total lending to homeowners aged 55+ via lifetime mortgages and home reversion plans grew by 24% year-on-year, compared with 31% lending growth across the wider mortgage market.

For the year as a whole, 76,154 customers took out new equity release plans, made use of drawdown reserves or agreed extensions to existing plans – up 4% increase year-on-year but below the peak of 85,497 seen in 2019.

Average loan sizes for equity release also increased, partly due to rising property prices and an increase in wealthier customers using equity release as part of their financial planning.

David Burrowes, chairman of the Equity Release Council, said: “Cost of living pressures are just one of many reasons why homeowners are choosing to cash in on years of wealth accumulated in their homes.

“Increasing loan sizes partly reflect the rise in house prices and a more affluent type of customer using lifetime mortgages to plan their finances or gift a living legacy to family members.

“Having proved itself to have solid foundations through a period of uncertainty, the equity release market’s return to growth has just as much to do with trust and innovation as it does with external factors as households look to manage their finances in later life.”

Will Hale, CEO of adviser Key, added: “Key’s market monitor suggests that the increase in the amount released is due the prevalence of gifting, debt management and remortgaging of existing equity release plans.

“Looking ahead, we anticipate that there will be pent up demand for discretionary spending amongst some over-55s who have found that their retirement is currently very different from what they anticipated.

“However, this is likely to be tempered by inflationary pressures and increasing numbers of customers seeking to boost their or their families spending power to meet rising household bills.”