The total amount of property wealth accessed via equity release hit a new high of £1.6bn in the second quarter of this year.

This surpassed the previous high of £1.53bn in the first quarter.

A total of £3.13bn was withdrawn via equity release in the first half of this year, according to the latest statistics from the Equity Release Council.

The number of new and returning customers rose 2% to 23,910 over the quarter, representing a 17% increase year-on-year.

Average loan sizes held broadly stable over the past year, with the increase in lending driven by more customers and a shift in product preferences towards taking lump sums rather than setting up drawdown arrangements.

David Burrowes, chair of the Equity Release Council, said: “The need to improve older people’s access to housing wealth was widely recognised by industry and policymakers¹ long before the Covid-19 pandemic and current cost-of-living pressures emerged.

“The fact that hundreds of homeowners are now choosing to release equity each day, based on detailed financial and legal advice, is significant progress from the days when the market was considered an under-developed niche rather than the mainstream option it has become.

“Raising awareness of how modern equity release products work alongside other financial solutions is essential so people who are asset-rich but cash-poor can benefit from the wealth they have built up over their lifetimes and also support those around them. The recent trend towards lump sum products is likely to be influenced by customers’ continuing desire to gift money to younger family members and share their property wealth across generations, particularly if cost-of-living pressures are starting to bite.”

Lump sum lifetime mortgages leapfrogged drawdown products to become the most popular choice and accounted for 54% of new plans agreed during the quarter. This is the first time since the first quarter of 2009 that more new customers have opted for lump sums over drawdown products.

A total of 12,485 new plans were taken out in the second quarter, a 26% rise year on year but below the record 12,891 set in the fourth quarter of 2018.

Average loan sizes remained relatively stable year-on-year, with the average new lump sum lifetime mortgage totalling £132,331 (compared with £129,558 a year earlier).