The equity release market experienced its most successful year in three years during 2012, as increased demand and interest from retired homeowners pushed sales of plans up by 10%.
Figures released by the Equity Release Council have found that the total value of the market rose to £925.7 million from £788.6 million in 2011, with the average value of an equity release plan standing at £52,191 last year, reflecting a 15-year high.
Figures for 2012 were given a boost by a highly successful fourth quarter, when the market value rose to £253 million, the highest quarter recorded since the end of 2008 at the height of the credit crunch.
Richard Eagling, editor of Investment Life & Pensions Moneyfacts, believes the heightened demand for equity release plans suggests that consumers are becoming more confident in their use of the products.
"The realization that equity release can be used to supplement retirement incomes that have been squeezed by falling annuity rates, disappointing pension fund returns and high inflation has clearly boosted demand," he said.
"With estimates indicating that more than a quarter of a million interest-only borrowers could reach retirement age by the end of the decade while still owing substantial sums on their mortgage, equity release is also likely to play an increasingly important role in enabling retirees to pay off existing debts."
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