Equity release activity became frenzied in the later months of last year, with both equity withdrawn by remortgaging properties and total equity release lending levels reaching dizzying heights.
According to figures released today by Legal Marketing Services (LMS), a total of £837m was extracted from properties through remortgaging in December 2015, up 32 per cent compared to £635m in December 2014.
However, December's figure was down on the £1.1bn withdrawn during November 2015.
Andy Knee, chief executive of LMS, remarked:
"Remortgaging activity slowed at the end of the year after a noticeable autumn rush. However, year-on-year figures show the market remains buoyant, with a marked difference from the year before. Rising housing equity and low rates means borrowers are able to withdraw large sums of equity to support Christmas expenses and buy presents for friends and family without dramatically increasing the cost of their loans."
Meanwhile, the average amount withdrawn per customer in December 2015 was £30,361, down slightly from £36,894 the month before but still higher than the £28,200 reported for December 2014.
The findings from LMS tally with research released yesterday by the Equity Release Council, which discovered that total equity release lending for 2015 reached £1.61bn, up 16 per cent from £1.38bn in 2014.
According to the Council, 2015's annual equity lending figures beat out pre-recession levels, when such lending hit a £1.21bn peak in 2007, with the rising number of over-55s using drawdown products behind much of last year's growth.
"These year-end figures are the latest sign of growing reliance on housing wealth as a key pillar of later-life financial planning," said Nigel Waterson, chairman of the Equity Release Council. "The rising popularity of drawdown has been one of the success stories of the last decade, and product features have since appeared allowing customers to protect a percentage of their equity as an inheritance, make part-repayments of capital or make interest repayments on their loan."
Commenting on the Equity Release Council's findings, Simon Chalk, equity release expert at Age Partnership, said:
"2015 marked an important year for those planning their finances for retirement. House prices climbed 9.5 per cent over the year, making people's homes potentially their greatest asset. During the year, more over-55s benefited from their increased housing wealth than before as annual equity release lending reached a new high."