Retired homeowners cashed in more than £641 million in property wealth during the first half of the year as the equity release market continued to grow strongly, according to analysis from Key Retirement Solutions.

The average loan taken by customers rose by 17% to nearly £65,000, the group’s Equity Release Market Monitor for H1 2014 shows. The firm says this demonstrates growing confidence in using property wealth to improve standards of living in retirement, driven by the strength of the housing market.

Total equity released in the six months to June 30th rose 26% to £641.8 million from £508.4 million in the first half of 2013, while plan sales rose 5% to 10,013 from 9,540 in the same period last year.

Money released is increasingly being used to improve standards of living, with 66% of customers using some or all of the cash to fund home or garden improvements compared with 55% last year. 35% of customers used the cash to pay for holidays, compared with 32% in 2013.

The analysis also shows the importance equity release plays in easing the burden of debt in retirement, with substantial numbers of retired homeowners clearing debts – 20% used some or all of the money to pay off mortgages, while 30% are clearing credit cards or loans.

Dean Mirfin, group director at Key Retirement Solutions, said: “Equity release is making a major contribution to retirement planning for thousands of homeowners and that is underlined by the growth in the average loan size of nearly £10,000.

“The massive changes on the way people fund and save for retirement highlight the increasing role that property wealth will play and the equity release market is ideally suited to the new retirement flexibility.”

The total amounts released rose in 11 out of 12 regions across the country, while plan sales rose in eight out of 12 regions. But growth in Northern Ireland was particularly strong where plan sales and total value released increased by nearly one-and-half times. London recorded growth in total value released of nearly 60%, while the South West and South East rose by 30% plus.