The Equity Release Council has reported that over-55s withdrew a total of £824 million of property wealth from their homes via equity release plans during the third quarter of 2017.

The Council said increased competition and a continued commitment to consumer safeguards supported a rise in new customer numbers and lending activity between July and September.

Total lending surpassed the £701m recorded in Q2 this year to become the highest figure seen in any single quarter since the Council began tracking quarterly activity in 2002. This represents a 44% year-on-year increase from Q3 2016 when lending stood at £572 million.

Members of the Council recorded a total of 17,982 customers between July and September, up by 12% from Q2. Of these, 9,905 of were new customers, representing a 17% quarterly increase from Q2 and a 34% annual rise compared with Q3 2016.

The remainder were made up of 6,849 returning drawdown customers releasing housing wealth in instalments (up from 6,566 in Q2) and 1,138 further advance customers agreeing extensions to existing plans (up from 1,002 in Q2).

The Council said that growing range of products on the market and increasing consumer appetite to use housing wealth as a source of retirement finance mean that Q3 lending activity has now risen by 82% in the last two years, up from £453 million in Q3 2015. New customer numbers have risen 64% over the same period from 6,049 in Q3 2015.

A further shift towards offering more breadth across drawdown lifetime mortgages to reflect consumer demand has meant the proportion of new customers choosing this option over lump sum lifetime mortgages or home reversion plans in Q3 2017 rose by nine percentage points to 77% from the previous quarter (68%) and 15 percentage points year-on-year (from 62%).

Drawdown products typically see customers releasing smaller amounts of equity to begin with (£64,793 in Q3 2017 vs. £100,389 via lump sum plans), therefore reducing the build-up of interest over the duration of the plan. It also provides customers with the flexibility to unlock further sums via future instalments as and when they need to.

Nigel Waterson, chairman of the Equity Release Council, said: “The sustained growth in housing wealth withdrawals is indicative of a wider shift in the way consumers are approaching their retirement planning, by taking a broader range of financial options into consideration.

“Property is, for many people, their largest asset and has the potential to play an increasingly important role in the future of retirement funding. The combination of rigorous safeguards and flexible products in today’s market is one reason why housing wealth is now being used to support a wide range of financial goals. These range from boosting pension income and supporting retirement lifestyles to funding home improvements and adaptations, consolidating debts and providing a living inheritance to younger generations.

“As more homeowners look to housing wealth as a source of retirement finance, the Council and its members will continue to ensure the highest standards of customer protection are in place alongside the continuing innovation that has seen the available product range triple since 2007.”

Stephen Lowe, group communications director at Just, said: “Accessing property wealth through equity release continues to provide homeowners with an attractive source of extra money in retirement without the cost and upheaval of downsizing. For some customers it’s a way of topping up their retirement income to help ends meet or pay off debt, while for many others it is wealth they feel is better deployed to improve their homes or lifestyles, or to pass on while they are still alive to see the benefit.

“Stringent safeguards surround the sale of equity release plans to ensure plans meet the customer’s needs and that they fully understand the impact their decision may have on their inheritance, benefits and tax situation. Equity Release Council members must adhere to a strict code of conduct that requires customers to be advised by a regulated financial intermediary and an independent solicitor, plus the plans themselves are regulated by the Financial Conduct Authority.

“In many cases, homeowners considering equity release find out during the process that they are missing out on State benefits income which can make a huge difference to their lives. Of those we advised, more than six in 10 (62%) found that they were not receiving any of their full State benefits and on average they were missing out on £576 a year. As a result of our robust advice process we recommend to many people that they should not proceed with equity release and consider other solutions.”