New lending in 2018 rose by 19% to £3.6bn, as the market doubled its size in just three years, from £1.71bn achieved in 2015, according to the latest figures released from the independent equity release adviser Key.
Sales of plans were 47,081, recording an increase of 21% from 38,955 in the previous year.
The average loan amount has seen a slight decrease year on year from £77,380 to £76,473 in 2018.
The report revealed that this year total lending may exceed £4.5bn, with new lending exceeding £4bn and new customers at more than 50,000.
Increase in gifting to family or friends
Of those releasing equity from their homes, 27% are using the funds to treat friends and family.
This is up from 24% in 2017 and highlights the intergenerational benefits seen within families releasing equity.
The major uses of gifts include clearing debts, paying for life events, as well as funding house deposits, university or school fees and day to day living costs.
The most popular use remains funding home and garden improvements with 64% re-investing some or all the money in their houses.
Around one in three paid for holidays and 31% used some or all the cash to clear credit cards or loans, while 22% paid off existing mortgages.
In 2018, homes paid out nearly £10m a day with customers releasing an average £76,500 to improve their standard of living in retirement.
Drawdown plans remained the biggest sellers accounting for around two thirds of the market, including 15% in enhanced drawdown, offering enhanced terms to people with health or lifestyle conditions.
In 2018, customers reserved £1.46 in funds using these products. Lump sum lifetime mortgages made up 36% of sales, including 13% of enhanced plans.
Will Hale, CEO at Key (pictured), said that debt remains a major issue for some retired people and substantial numbers are relying on equity release to clear credit cards and loans as well as paying off mortgages.
He added: “Good specialist advice is key to ensuring that older homeowners receive the most benefit from their property wealth and use it in the most appropriate way for them and their families.”
By region, the report found that the biggest increase in value released was in Scotland, where total value rose by nearly 38%. The West Midlands, Yorkshire and Humberside as well as Wales all recorded major gains.
Northern Ireland saw the biggest increase in plan sales with a 47% rise throughout 2018, followed by North East, West Midlands, Yorkshire and Humberside.