Equity release lending in the third quarter of the year rose by £68.3m compared with the previous quarter, according to latest figures from the Equity Release Council.

This was the biggest quarterly rise since Q2-Q3 2004 (£78.4m) as more homeowners over the age of 55 make use of their housing wealth to support their finances in later life.

The figures show rising demand in Q3 as the market registered its fastest annual growth rates of 2015 in terms of lending and the number of plans agreed.

Total Q3 lending rose 21% year-on-year, compared with 18% annual growth in Q2 and 3% in Q1, to reach £452.6m. In doing so, it set a new lending record for a second successive quarter: equivalent to £5m of housing wealth being accessed every day.

There were 6,049 new plans taken out in Q3 2015, representing a 12% increase on Q2 and the first time this measure has exceeded 6,000 since Q4 2008. The volume of new plans in Q3 was up 9% year-on-year: the strongest figure of 2015 to date, compared with 3% annual growth in Q2 and 2% in Q1.

Growing demand for equity release to help boost retirement incomes and meet later life expenses means lending for Q1-Q3 2015 already exceeds the 2013 annual total (£1.16bn vs £1.07bn), and is within £220m of the record annual total of 2014 (£1.38bn).

Lending via drawdown lifetime mortgages reached a new high in Q3, rising 18% year-on-year from £231.6m (Q2 2015) to £266.8m. Drawdown products have become increasingly popular since their introduction in the mid-2000s as equity release customers took advantage of the opportunity to boost their income with regular instalments.

The value of lending via lump sum lifetime mortgages also increased by 18% year-on-year in Q3 2015 to reach £183.5m, the largest figure since Q4 2006 (£204.7m). Lump sum mortgages can prove popular for customers who have a larger one-off cost to cover, such as clearing an outstanding mortgage or making home improvements.

Despite accounting for less than 1% of the total market, lending via home reversions almost tripled from £632,647 in Q2 2015 to £2.37m in Q3 2015.

The latest lending data follows the publication of a report by The Council outlining key recommendations for the government to help equity release meet the challenges of an ageing society, and calling on HM Treasury to take a lead on coordinating relevant policy to benefit consumers.

Nigel Waterson, chairman of the Equity Release Council, said: “Appetite among over-55 homeowners for tapping into their housing wealth continues to grow. There is increasing awareness that equity release can offer many benefits in later life by providing people with extra income or the means to meet other costs and expenses.

“The months ahead will see important discussions with regulators and government about how to build on this foundation, so that where there is a need, more people can make use of what is often their biggest source of retirement wealth.

“New arrivals in the sector and additions to the product range are helping more people to find options that suit their needs and circumstances. The sector will continue to innovate, as well as maintaining The Council’s standards of financial advice and consumer protections so customers continue to be fully informed and supported in their retirement planning.”

Dean Mirfin, technical director at Key Retirement, said: “The figures announced today show that the sustained growth we have seen throughout 2015 shows little sign of wavering as we enter the final quarter of the year. With both HM Treasury and the regulator now throwing the spotlight on ways that consumers can better access and utilise wealth locked up in property, we expect this growth to continue in to 2016 and beyond.

“With the average amount released from properties so far this year approaching three times the average DC pension pot the need to utilise property wealth and the direct positive impact that it can have on retirement finances cannot be understated.”