Equity release lending in Q4 2017 amounted to more than £838m, the highest level on record for any single quarter, and took the annual total to £3.06bn.

This meant annual lending growth of 42% compared to the £2.15bn during 2016, according to the Equity Release Council (ERC) figures.

Overall, the sector supported almost 67,000 customers during 2017, with 37,037 new equity release plans agreed in 2017, up 34% on 2016. This was the highest total on record and the biggest percentage rise since 2003.

ERC chairman, David Burrowes, noted that the record-breaking demand for equity release highlighted consumers were changing the way they planned financially for retirement and were taking a broader range of options into consideration.

“This is illustrated by the continued popularity of drawdown products, with many customers viewing equity release as a reliable source of income in later life,” he said.

Intrinsic mortgage network managing director, Gemma Harle, said the continued growth renewed the need for a dedicated advice qualification.

“It is crucial to take advice as relying on your home in retirement is difficult and accessing it isn’t as simple as opening the right door,” she said.

“Last year the Financial Conduct Authority (FCA) decided to drop plans to create a standalone equity release qualification for financial advisers. These figures suggest a review of the qualification would make some sense, given the general direction of travel for retirement planning.

“This would help financial advisers meet the growing demand for a holistic approach to financial planning that includes equity release, whose popularity is growing at a serious pace.”

Product preference

Drawdown lifetime mortgages remain the most popular type of product, with 71% of new customers choosing them last year. The remainder opted for lump sum lifetime mortgages.

In Q4 new drawdown customers agreed an average initial instalment of £62,359, up 6% year-on-year but down slightly compared to the previous quarter.

Lump sum customers also increased the amount they borrowed in the final three months of the year to an average of £101,913.

However, the continuing trend towards drawdown products as a way to release housing equity in smaller instalments meant that despite the overall growth of lending activity, average lending per customer was stable year-on-year at £72,217 in Q4 2017 compared with £71,627 in Q4 2016.

ERC’s Burrowes added that consumers had more choice than ever before driven by the increasing number of providers and products which had helped to push interest rates to new lows.

Related: See YourMoney.com’s Downsize vs equity release: what’s the right decision for you?