Funding home improvements is the leading reason for people to unlock cash from their property, according to LV=.

Equity release lending has reached £1bn so far this year and the need to renovate is the reason 48% of all LV= equity release customers have taken out a loan. However, the equity release provider says its customers are more likely to be making essential modifications e.g. widening doorways for wheelchair access or installing a stair lift than adding a conservatory or loft extension.

The research also shows that people are using equity release to relieve pressure on the purse strings. The figures for the year to date reveal that 15% of LV= equity release customers wanted to use the money to top up their retirement income, with a further 9% wanting to clear an outstanding mortgage and other existing debts and loans.

Financial necessity has driven much of the demand for equity release. However, treating or helping out family also remains a common reason for choosing equity release, with 10% stating this as their motivation. Whilst using the freed up equity for a holiday accounted for 6% of applications.

Vanessa Owen, head of annuities and equity release at LV=, said: “Whilst home improvements continues to be the most popular reason for using equity release, market growth is also being driven by the need to meet and reduce financial commitments. With the reality of living on a low pension income hitting home for many retirees, it makes sense that many wish to unlock the cash tied up in their properties. At retirement, someone’s largest asset is usually their house and for those retirees who wish to stay in the home that they love, then equity release is a solution worth considering.

“This year’s Budget announcement gives new retirees more flexibility as to how they take their pension, but they will still see their income drop when making the transition from working to retirement. As a result we are likely to see demand for equity release grow as those with small pots look to fund their later years.

“It is essential that retirees consider all their options and that equity release is considered alongside other retirement income solutions so that they are able to effectively plan for the future.”