Total sales of plans climbed 7.2% to 17,121 in the period from 15,969 over Q1 to Q3 2009 with drawdown plans – which enable customers to take cash when it is needed rather than as a single lump sum – making up 74.5% of sales compared with 63% last year.
The effect of the continued move towards drawdown can be seen in the average amount released which for the nine months was £39,953 compared with £41,728 in the same period of 2009.
Across the country eight out of 12 regions saw growth in the total amount of equity released with the South East seeing the largest volume of equity released so far this year at £155 million and Northern Ireland the lowest at just £4 million.
The research from KRS shows the average loan-to-value of equity release plans fell to 21% from 22% reflecting the shift to increased use of drawdown plans. Single advance lifetime mortgages made up 24% of sales in 2010 compared with 34% in 2009 while reversions slipped from 3% of total sales last year to 1.4% in the first nine months of 2010.
KRS also said that nearly two out of three customers opting for equity release are using some of the cash for home and garden improvements.
The advisers said this may be an indication that those unable or unwilling to move in the current climate are deciding to stay put instead and invest in their homes.
Around 35% of customers used some of the money to pay off credit cards or loans in the three months to September 30th – virtually unchanged on 36% in 2009.
Dean Mirfin, group director at Key Retirement Solutions, said: “Total sales of plans and total amount of equity released are both demonstrating strong growth with customers increasingly using the money to improve their homes or gardens.
“It’s a measure of confidence that customers are using the money for leisure and lifestyle improvements although clearing debts remains a major part of the market.
“Innovation by providers involving the launch of products offering enhanced terms for customers with medical or lifestyle conditions plus increasing use of drawdown all adds to more competition among providers which points to further growth into 2011.”