The total value of equity released from property in the third quarter rose 18.8% to just over £1bn.

However, the number of equity release plans decreased year-on-year to 10,333 according to data published today by equity release adviser Key.

Key analysed data from the whole market.

The number of equity release plans started remains below pre-pandemic levels (Q3 2019: 11,772 plans).

Total equity released in the year-to-date was £2.989bn, just short of the £3.4bn released across the whole of 2020. Key said the market is on course for a record £4bn in equity released this year.

The equity release adviser said big ticket items such as debt management and gifting was behind nearly two-thirds of the equity released in the third quarter.

Nearly three quarters of the money released (73%) in the third quarter was used for debt management and to helping family and friends. Around £588m of the money released in the quarter was used to clear debts, while more than two-fifths (42%) of the cash given to family and friends was used for house deposits, while 36% was given as an early inheritance.

Around three-quarters of consumers using equity release in the third quarter took out drawdown plans with the average initial advance £57,183. This leaves consumers with the ability to draw a further £301.5m.

The average customer for the quarter was 70, with 49% of those who took out an equity release plan being between the age of 65 and 74.

Will Hale, CEO at Key, said: “Against the backdrop of a pandemic, the equity release market is on track to break the £4 billion barrier and potentially even touch £4.5 billion by the end of the year. This performance demonstrates how modern equity release products are now embedded within the mainstream financial services market, offering low rates and flexible features to address a wide range of different customer needs and wants.”

Most regions of the country saw the value of property wealth increase in the third quarter, with only Scotland and the South-East recording small falls.

Northern Ireland led the way with the value of property wealth released more than trebling (267%) over the quarter while Wales and East Anglia saw growth of 74.7% and 61.6% respectively.