There was a six per cent rise in the number of plans taken out during the quarter, as 11,881 were taken out compared to last year’s first quarter where 11,190 plans were taken out.
However, equity release customers released less money from their homes, as the average loan amount fell nine per cent to £67,769 from last year’s £75,031.
The average property values of those who have taken out equity release increased by 2.4 per cent year-on-year from £316,216 to £326,486.
The value of reserved drawdowns also rose 12 per cent from £349m to £390m quarter-on-quarter with drawdown plans accounting for 72 per cent of new business, up from 66 per cent in 2019.
Some 63 per cent of those who release equity from their homes use it for renovation, however, the value of the money used only accounts for 17 per cent of the value released.
Gifting is the main reason for 29 per cent of equity release borrowers, which accounts for 21 per cent of the value unlocked.
Some 25 per cent of borrowers use the equity released for unsecured debt repayments and 23 per cent use it to repay their mortgage. The value of the money used for these purposes makes up 12 per cent and 25 per cent of the money released respectively.
Will Hale (pictured), CEO at Key, said: “Following a year of political and economic uncertainty the equity release market started well in 2020 and has proved remarkably resilient given the unprecedented circumstances the UK and the world finds itself in.
“Consumers are more cautious and while we are finding an increased number of people using equity release, they are taking out less and using more drawdown products to help future proof their later life finances while mitigating the impact of roll-up interest.”