Homeowners over 55 unlocked £1.17bn of property wealth using equity release during Q2 2021, a rise of 2% from Q1 (£1.14bn) and 67% (£698m) since a subdued Q2 last year during the first Coronavirus pandemic lockdown.

Drawdown lifetime mortgages remained the most common type of new plan agreed (55%), although more customers took out lump sums in June before the Stamp Duty holiday started to wind down.

Returning drawdown figures increased the most during Q2 after many existing customers paused withdrawals in 2020.

Stephen Lowe, group communications director at retirement specialist Just Group, said the figures show a strong boost to the numbers of homeowners using their property wealth to help get younger generations get onto the property ladder.

He said: “The Q2 figures show a pick-up in lump sum lending which suggests older people are releasing cash to help younger generations while they can take advantage of lower Stamp Duty rates. Drawdown plans remain the most popular style of solution. That’s a good example of how modern equity release plans offer customers the flexibility they need - whether that’s to release cash to bolster retirement income, to pay for home adaptations or improvements, to pay for care at home, or to gift while still alive to see the benefits.”

Will Hale, CEO of equity release adviser Key, said it was encouraging to see equity release being increasingly used as a vehicle to fund property purchases, but it would be interesting to see how this changes as the property market adapts to the end of the Stamp Duty holiday.

He added: “Throughout the Covid-19 pandemic, the later life lending market has remained relatively robust and since Q3 2020 the market has steadily been growing quarter on quarter. The fact that it is almost at pre-pandemic levels is a testament to the sector as a whole working collaboratively to keep things moving but also reflects the fact that lenders have continued to innovate to ensure products evolve to meet the changing needs of customers.”

According to Key, the total number of equity release products now stands at over 700.

David Stevens, director of savings and retirement at LV=, said he expects the equity release market will grow strongly in the second half of the year as Coronavirus pandemic restrictions comes to an end, and that it will continue to grow into 2022 as property becomes an increasingly key component in retirement planning.

He said: “It is good to see that the equity release market is recovering from the effect of the Covid pandemic. LV=’s research indicates that a growing number of wealthy consumers are recognising that equity release is an important option when it comes to funding retirement.

“Many customers are using the equity in their homes to pay off loans and outstanding mortgages (40% in 2021 compared to 36% in 2020) while others use it for home improvements and helping their family. Research from the LV= Wealth and Wellbeing Monitor shows that 11% (5.8m) UK adults are planning to use the value of their home to help fund retirement.”