Total advances of £224.8m were recorded in Q2 2012 – a 22% rise on Q2 2011 (£184.8m) and the biggest increase since 2009’s Q4 (£231.7m).
Andrea Rozario, director-general of ERC said: “This quarter has been the most successful period for the equity release market in two and a half years.”
The number of plans sold grew to 4,302 – 6% up on Q1 2012 (4,057) and 16% up on Q2 2011 (3,710). However, this is down from 4,399 (Q4 2011).
Meanwhile, take-up of drawdown plans have increased to 68% of the market compared to 67% in Q1 2012. Lump sum mortgages make up a third (32%) of the market and home reversions account for 1%.
Rozario added: “This clearly shows that there is an appetite for these products and that as life returns to the UK mortgage market, the equity release market is also returning to growth.
“Obviously, we are not out of the woods yet and much work still needs to be done to improve consumer understanding of these products. However, this quarter’s figures indicate that going forward, more and more consumers are going to be using their equity to improve their standard of living and pay for costs in retirement.
Roger Marsden, head of at retirement at Aviva, said: “We believe that today’s figures signal a return to positive growth for this market and we expect that 2012 will be a better year for equity release than 2011.”
