A new record high of 23,395 equity release customers accessed the wealth in their property during the first quarter of the year, new figures published by the Equity Release Council have revealed.

This is the highest quarterly figure recorded by the Council, as total lending for Q1 reached £1.53bn – a figure up from £1.34bn in Q4 2021, and up 34% year-on-year from Q1 2021.

The latest data also showed that the number of new equity release plans agreed reached 12,174 during Q1. This was a 21% year-on-year increase from 10,030 in Q1 2021, which was down 9% from the previous year as a result of the pandemic.

A total 150,653 new and existing customers have now been active in the market during the pandemic, starting from Q2 2020, compared with 171,586 in the previous two years.

“Not only are more people considering equity release, but they are doing so for many different reasons and helping old and young alike to fund everyday costs and major life events,” said Chair of the Equity Release Council, David Burrowes.

“Innovation has made equity release products more adaptable to customers’ changing circumstances. Our standards mean lifetime mortgages remain the most secure type of retirement home finance, with customers protected from interest rate rises, repossession and passing on debt due to negative equity.

“However, it remains vital that decisions are carefully considered through both a long-term and short-term lens, with family input wherever possible and with financial and legal advice in every instance.”

March also saw the Council introduce a fifth “product standard” for all plans it recognises, guaranteeing new customers’ right to make penalty-free partial repayments. The Council highlighted that this has become an increasingly common design feature of modern equity release plans, with existing customers saving almost £100m in future interest costs by using this flexibility during 2021.

Drawdown lifetime mortgages remained the most popular option with new customers for the period (54%), while 46% opted for a lump sum lifetime mortgage.

CEO at Key Later Life Finance, Will Hale, said that product flexibility is “vital” to the sector’s continued development.

“It is worth noting that customers saved almost £100m in future interest costs in 2021 by making penalty-free partial repayments,” Hale commented. “With the introduction of this flexibility as the fifth standard, customers now have more choice than ever before to find a product which fits with their changing circumstances through later life.

“Property wealth is firmly established as an integral part of retirement planning and will remain important not least because of the cost-of-living pressures which are affecting household bills for all sections of society with inflation at a 30-year high.”

Air Group CEO, Stuart Wilson, added: “Until inflation starts to ease, we anticipate that we will see the number of borrowers using later life lending to reduce the pressure on everyday expenditure continue to build.

“Our market is growing rapidly, as shown by quarterly lending figures reaching £1.53bn, and the onus is on advisers to guide borrowers towards the best solution for their financial needs amongst the increasing number of options. Advisers are the beating heart of our market and will be crucial to securing the wellbeing of borrowers in what is likely to be a penny-pinching year.”

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