The Spring 2020 Market Report from the Equity Release Council has revealed that equity release average rates in January 2020 fell to to a record low of 4.48% as product options surpassed 300.

Meanwhile, average equity release rates fell to a record low of 4.48% in the second half of 2019, while two out of five products have rates lower than 4%.

According to the report, there was an expansion in the wider later life market, as total sales of all mortgage products to customers aged 56+ rose by 25,212 between H1 2015 and H1 2019.

On the product side, 63% of new customers opted for drawdown lifetime mortgage products, taking smaller amounts up-front than lump-sum products.

David Burrowes, chairman of the Equity Release Council, said: “Hopes that the UK would leave behind the political and economic uncertainty of 2019 have been rapidly overtaken in recent weeks by the national and global response to the coronavirus outbreak.

“Reflecting on 2019, the equity release market remained robust, as for a second year running older homeowners unlocked nearly £4bn of property wealth. While uncertainty becomes the norm, property wealth will inevitably continue to play a role over the months and years to come, to help meet the wide-ranging needs of the UK’s ageing population.

“The increasing diversity of firms in the market reflects the wide range of consumer needs which property wealth is helping to address. It is also a sign of the greater frequency with which the option of releasing equity is coming up in retirement planning conversations.

“Equity release is a long-term commitment that can only be made after careful consideration, regulated financial advice and independent legal advice. Strong consumer safeguards will continue to ensure equity release is chosen for the right reasons, with applications vetted prudently and carefully by weighing up both short- and long-term needs.”

Alice Watson, head of marketing, insurance at Canada Life, added: “Despite some of the challenges the sector is facing today as a result of coronavirus, it’s welcome news to see the later life lending sector end 2019 on a high. Increasingly flexible solutions, combined with competitive rates are giving the over-55s the opportunity to tap into their property wealth in a number of ways. This includes guaranteeing inheritance to leave to loved ones, accessing a cash reserve facility or even making penalty free repayments.

“It’s encouraging to see that customers are increasingly aware of how the equity stored in their homes can help them enjoy the retirement they’ve worked long and hard for, whether that be to supplement retirement income, make home improvements or even support family members. As more advisers enter into the later life space, we expect to see equity release play a bigger role as part of a blended retirement plan. Ultimately, it’s our responsibility as an industry to continue working together to provide innovative solutions to meet the needs of today’s retirees.”