Figures from its market monitor suggest an increase of 5.6 per cent in the number of plans sold to 22,126, while the total value released edged up by three per cent to £1.68bn.
In contrast, over the whole of 2018 plan sales rose by 21 per cent and the value released by 19 per cent.
Once potential further advances of £706m on drawdown are taken into account, Key’s data suggested that the first six months recorded total borrowing of £2.38bn.
Average loans taken by customers also slipped in value by nearly £2,000 to £76,064 compared with the same period a year ago as the market stabilised in the face of continued political and economic uncertainty.
Key said this suggested that “the sector is reacting to current economic conditions seen across the property market and growth has slowed”.
However, there was more positive sentiment from the period with new funders entering the market and historically low interest rates.
The biggest single use of property wealth remained home or garden improvements factoring into 64 per cent of transactions, while 28 per cent of borrowers made gifts to family typically to help with house purchases or weddings.
But up to half of all customers used equity release to repay debt – either in the form of mortgages (20 per cent) or unsecured debt (30 per cent) as people increasingly looked to housing equity to shore up their finances.
Subdued first half
Will Hale, CEO at Key, noted that against the backdrop of economic uncertainty, the equity release market had seen a subdued first half with slower growth than in recent years.
“While the key market drivers of low pension saving and substantial property wealth remain, the over-55s are taking a cautious approach to accessing the value tied up in bricks and mortar at the moment but as confidence returns we do expect the market to pick up,” he said.
“That said, the market is benefiting from the arrival of new sources of funding which is helping to keep rates at historic lows and to drive the launch of various new products.
“Consequently, we have seen an increase in the number of customers remortgaging to benefit from lower rates or the opportunity to release additional equity due to house price rises or the higher loan to values (LTV) that are now available.”