Older homeowners used equity release to unlock an average £111,500 in property wealth during the first three months of the year, new data published by Key Later Life Finance has revealed.

The equity release adviser’s figures show that plan sales also surged by 21.4% in the first quarter compared to last year, to 12,551.

Key also announced that the value of new equity released soared by 30.5% to £1.40bn – the highest on record for the industry.

The strength of the housing market has meant the average amount released climbed 7.5% from £103,710 taken out last year, while existing equity release customers have also benefited too. They were able to release another £373m in further advances or drawdown, which Key suggested highlights how the impact of rising house prices has increased the number of customers using these flexibilities.

Low rates and increasing flexibility of equity release plans is driving an increase in remortgaging – with Key estimating that 1,789 remortgaging cases were completed in the first quarter, a 78% increase on last year’s 1,005.

Furthermore, customers moved an average £121,073 from an interest rate of 5% to 4.1% during the period and the surge in business meant it accounted for 25% of all equity released for debt management. Key said the rise in flexibility is demonstrated by the number of products available – customers in Q1 2022 could choose from 1,557 plans, compared with 518 in the same period last year.

“With headlines suggesting that the UK is facing a challenging inflationary environment, we are seeing older customers increasingly choosing to manage their debt using equity release,” commented Key CEO, Will Hale.

“Although being able to clear any borrowing before retirement is obviously ideal, with modern equity release products now offering all new customers the opportunity to make penalty-free capital repayments over-55s have more options than ever before.

“It is this type of innovation that serves to meet developing customer needs and has seen Q1 2022 recording record numbers of plans taken out. Nothing is certain but following a hugely successful Q1, the market in 2022 looks to be in a position to grow and serve more customers than ever before.

“As an industry, we need to continue to rise to the challenge of supporting an ever more diverse universe of clients by building on the evolution that has seen huge growth in the number of products and features available as well as more choice in how customers access specialist advice.”

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