This was almost a quarter more than the £1.1 billion release during 2006.
The average age at which retirees are plumping for equity release options is dropping, with last year seeing it fall back one year to 68.
Demand for schemes increased by 9 per cent in 2007, however certain types of equity release scheme are breaking away from the pack.
Key Retirement Solutions noted that the proportion of lifetime plans being taken out fell from 69 per cent to 43 per cent year on year as demand for both reversion and drawdown schemes saw a surge following the introduction of FSA legislation.
Dean Mirfin, business development director at Key said: “The increase in the drawdown facility is in line with predictions as many consumers prefer the option due to the cost advantages of the product. Consumers feel more in control of their money choosing to make withdrawals as and when they need to.
"The drawdown market will stabilise throughout 2008 and we can expect to see it holding a 50-60 per cent share of total plans sold.
"If in 2008 we do enter a period of zero growth in property prices, or even a downfall for some, then Reversion Plans will become more appealing and we can expect to see a rise in take up as consumer confidence grows.”
Regional trends
Northern Ireland continues to see impressive growth and once again saw the biggest leap in the number of people releasing equity from their home, up by 208 per cent. The value of plans taken out increased by a staggering 305 per cent in one year to £21.1m.
Unsurprisingly, London (£218.5m) and the South East (£343.9m) saw the biggest sums of equity released from homes in 2007, followed by the South West (£190.6m).
However, the North West and the West Midlands saw a drop in the number of equity release plans taken out in 2007 versus 2006. Theformer saw an 11 per cent drop in the overall value of plans taken out.
