A record quarter for equity release activity in the last three months of 2017 took the sector through the £3bn annual lending total for the first time.

Equity release lending in the last quarter of 2017 amounted to more than £838m, the highest level on record for any single quarter, and took the annual total to £3.06bn.

This meant annual lending growth of 42% compared to the £2.15bn during 2016, according to the Equity Release Council (ERC) figures.

More borrowers choosing equity release

Overall, the sector supported almost 67,000 customers during 2017, with 37,037 new equity release plans agreed in 2017, up 34% on 2016. This was the highest total on record and the biggest percentage rise since 2003.

ERC chairman David Burrowes noted that the record-breaking demand for equity release highlighted consumers were changing the way they planned financially for retirement and were taking a broader range of options into consideration.

“This is illustrated by the continued popularity of drawdown products, with many customers viewing equity release as a reliable source of income in later life,” he said.

Product preference
Drawdown lifetime mortgages remain the most popular type of product, with 71% of new customers choosing them last year. The remainder choosing lump sum lifetime mortgages.

In the last three months of 2017 new drawdown customers agreed an average initial instalment of £62,359, up 6% year-on-year but down slightly compared to the previous quarter.

Lump sum customers also increased the amount they borrowed in the final three months of the year to an average of £101,913.