Equity release achieved its best quarter on record in Q4 as lending reached £670m and the number of new plans exceeded 8,000 for the first time, Equity Release Council stats show.
With the help of the strong final quarter lending smashed the £2bn barrier by reaching £2.15bn. This represented a 34% increase year-on-year, double the 16% growth rate from 2014 to 2015.
Nigel Waterson, chairman of the Equity Release Council, said: “2016 has proven to be a historic year for the equity release sector.
“Passing the £2bn mark for the first time indicates that housing wealth is becoming an increasingly important focus of retirement planning.
“The market continues to become ever more competitive with growing choice and falling rates for customers a welcome consequence of moves by new and existing providers.”
Lump sum lifetime mortgages saw 26% more plans in 2016, outstripping the 19% growth rate of drawdown volumes.
However drawdowns still made up 65% of the market, with lump sum taking much of the remaining 35%.
Waterson added: “It is vital that we now build on this momentum to ensure more people can access the necessary information and advice to make informed choices about how best to use their various assets in later life.
“With increased recognition of the role housing wealth can play, we look forward to working closely alongside government, regulators and industry to help support the UK’s ageing population.
“The sector’s commitment to high standards of advice and product provision has established a safe and reliable market for consumers, and with our membership also at record levels, The Council will continue to work with members to support best practice.”