The equity release market could exceed £1 billion this year after the third quarter saw plan sales and lending rise by 11%.
Figures from Key Retirement Solutions (KRS) show total lending rose to £256.6 million in the three months to the end of September.
According to KRS, the figure would have reached £383 million if unreleased drawdown funds were added.
Plan sales rose 10% to 5,260 over this period compared with 4,779 in Q3 2011. There was 11% growth in total lending over the same period.
The research found a fifth (19%) of customers used some or all of the cash to pay off mortgages.
Drawdown made up 70% of total sales compared with 29% for lifetime mortgages and 1% for reversion plans.
Across the UK, nine out of 12 regions saw growth in the number of plans sold with Northern Ireland recording a rise of 75%. The North and London saw rises of 34% and 35% respectively. However, Yorkshire & Humberside had a fall of 9%.
Dean Mirfin, group director at Key Retirement Solutions said "The on-going squeeze on pensioner income and the ticking time bomb of interest-only mortgages are making the case for equity release.
"Continuing innovation in the market with the launch of plans designed to tackle interest-only issues as well as enhanced products for people with medical and lifestyle conditions underline how the market is expanding."
Pain thresholds key
To communicate equity release's wider opportunities and benefits, writes Chris Flowers, providers and advisers need to think about how best to engage not only its usual target audience but also their families
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