The Equity Release Council has reported that 2022 saw record activity with 93,421 new and returning customers choosing to access their property wealth via equity release products, up 23% year-on-year – the highest rate of growth since 2018.

Total annual lending reached £6.2bn, a new high following the 30th anniversary of voluntary regulation being introduced, up 29% from £4.8bn in 2021 and double the £3.06bn seen in 2017.

Nearly 50,000 homeowners took out new plans, up 20% on 2021, with all new plans since 28 March 2022 guaranteeing customers the right to make voluntary penalty-free partial repayments to reduce interest costs.

Activity dipped in Q4 as market disruption following September’s ‘mini-Budget’ prompted rate rises, reduced product availability and shook consumer confidence.

December was the quietest month since before the Covid-19 pandemic as customers took stock at the end of the year, with loan sizes reduced in Q4.

David Burrowes, chairman of the Equity Release Council, said: “We saw a glimpse of the equity release market’s potential in 2022 as it returned to its previous growth path with a growing customer base making use of improved products and added protections. In a climate where retirement incomes have to stretch further for longer, property wealth is as important to many people’s financial wellbeing as their pension.

“The unmet needs of the UK’s ageing population have seen the equity release market double in size since 2017, channelling decades of experience in helping older homeowners to gain financial freedom. Today’s equity release customers are more in control of their costs than ever before, with the right to make voluntary penalty-free partial repayments and the option of fixed early repayment charges which reduce to 0% over time

“Factors outside the industry’s control meant 2022 ended on an unusually quiet note in December, after the mini-Budget fuelled rate rises and tightening criteria. However, releasing equity is not a choice to make on a whim, and we are encouraged by signs that customers are pausing to assess their options. Seeking informed financial advice and independent legal advice from firms who sign up to Council standards is essential at the best of times, and more so now than ever.

“While some consumers may delay a decision about unlocking property wealth in 2023, many people will find that releasing equity is an appealing and essential step to move ahead with their lives and support their families’ needs.”