Figures from the Equity Release Council revealed total Q3 lending rose 21% year-on-year compared with 18% annual growth in Q2 and 3% in Q1.
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.
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).
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.
Nigel Waterson, chairman of the Equity Release Council, said: “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.”
Alice Watson, product and communications manager at Retirement Advantage Equity Release, called the figures “striking” and said the market is “witnessing a year where equity release firmly establishes itself in the mainstream retirement lending landscape”.
She added: “The industry is innovating as providers bring exciting new products to market, while customers’ needs evolve as the retirement landscape is reshaped. More and more customers using equity release to fund a home purchase only goes to show how people are feeling better equipped to live the lives they want as they retire.”
In September this year the Financial Conduct Authority confirmed plans to conduct a review into the equity release sector including an investigation into whether products were innovative enough.
Dean Mirfin, technical director at Key Retirement, said this combined with HM Treasury’s review of financial advice “throwing the spotlight on ways that consumers can better access and utilise wealth locked up in property” he expected this growth to continue in to 2016 and beyond.
He added: “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.”
