The Equity Release Council (ERC) has revealed that homeowners aged 55+ took out a record 13,452 new equity release plans between July and September 2022 (Q3 2022), an 8% increase on the previous quarter.

With 9,648 returning customers and 2,419 further advances agreed, the market saw 25,519 customers active during Q3 with total lending topping £1.71bn, another record figure.

New customer numbers increased by 34% year-on-year, with total lending to new and returning customers growing by 49%.

New plan sizes were largely stable at an average of £133,770 for lump sum lifetime mortgages, up 1% from Q2, while new drawdown plans dipped 3% to £88,340 for the initial withdrawal.

Activity reduced 10% in the final month of Q3 as September saw challenging economic conditions and product prices rise.

David Burrowes, chair of the Equity Release Council, said: “The summer months have seen the equity release market resume its pre-pandemic growth trajectory, with extra protections having been added in the intervening years so all new customers can make voluntary repayments when they can afford to and reduce their overall costs. Equity release is not an overnight purchase, and the desire to secure lower interest rates before anticipated rises is likely to have influenced customers’ timings as they completed deals from earlier in the year.

“While recent turbulence in financial markets have added to upward pressure on interest rates, product flexibilities and stringent safeguards mean modern equity release remains the most secure and adaptable way to access the money tied up in your home without giving up ownership or risking repossession through fixed repayment commitments.

“With the value of UK homes having passed £7 trillion, people are increasingly inclined to put their property wealth to work in later life to support themselves and family in the here-and-now.

“Council standards mean there are measures in place to protect customers’ existing loans from rising interest rates, as well as ensuring that people can only take out equity release once they have considered it from every angle through detailed financial and legal advice.”

Stephen Lowe, group communications director at Just Group, added: “Total Lending has surpassed last year’s record of £4.8 billion with the final quarter – usually the busiest period of the year – still to come. Customer numbers are on course for record levels this year too.

“These figures highlight the increasing appetite for people to make use of the wealth stored in their homes to meet their lifestyle aspirations whether they are seeking to help their families, generate extra retirement income, or pass on lump sums as part of an inheritance planning strategy.

“We are optimistic that, despite the changing interest rate environment, this is a market with significant growth potential. There seems to be a broadening awareness of how the value people have built up in their homes can be used in later life. Today’s customer benefits from a wide range of providers competing for their business and a host of options to tailor the plan to fit their unique needs.

“Lifetime mortgages are fast becoming a core part of later life financial planning for many homeowners but the expertise and knowledge of a high-quality professional adviser is essential in getting the right outcome for individual customers.”