Fourth quarter total equity release advances last year totalled £215.9 million, trade body SHIP has revealed.

This is the highest level since the fourth quarter of 2009 (£231.7 million) and much higher than the same time last year (£188.5 million in the fourth quarter of 2010).

The number of plans sold also increased to 4,399 from 4,148 in the third quarter of 2011, the highest level since the first quarter of 2010 (4,716).

The majority of borrowers continued to choose plans which allowed them to reserve a proportion of their equity and then access it in smaller tranches. Indeed, drawdown now accounts for 62% (in the fourth quarter of 2011) of the market followed by lump-sum mortgages (36%) and reversions (2%).

In the fourth quarter of 2011, intermediaries sold 90% of all equity release plans (by volume – £193.3 million) compared to direct sales of £22.6m (10%). This is the highest level since SHIP started tracking this data (the first quarter of 2003) and reflects the impact of the gradual reduction in the number of providers with direct sales forces, the trade body said.

While the fourth quarter of 2011 saw equity release sales revert to more normal levels, the value of plans sold in 2011 (£788.6 million) was below that of 2010 (£803.6 million). The trade association said that this reflects the fact that while the fourth quarter of 2011 was SHIP’s best quarter in two years, there were fewer providers in 2011 due to market consolidation.

Andrea Rozario, director general of SHIP, said: “We are delighted to report that not only did total advances reach a two-year high in the fourth quarter of 2011 but this is the third quarter of growth in equity release sales. This is excellent news and puts the industry on track for a strong 2012.