There was £1.06bn of equity release activity in Q1 before lockdown took effect, data from the Equity Release Council shows.
This represents a rise of 14% from the £936m recorded over the same period last year.
It was driven by strong consumer confidence in early 2020 after the general election.
David Burrowes, chairman of the Equity Release Council, said: “These figures reflect the return of consumer confidence to the broader UK economy at the start of the year, after December’s election promised to restore certainty before coronavirus took hold.
“Pent-up demand from 2019 meant homeowners continued to look to property wealth in growing numbers for later life finance in January and February, backed by strong consumer protections and increasing product flexibility.”
There were 11,079 plans agreed in Q1, the largest total in the first quarter since records began in 1991.
Drawdown lifetime mortgages made up 57% of plans taken out, with lump sum mortgages accounting for 43%.
Claire Singleton, CEO of Legal & General Home Finance, said: “The current Covid-19 environment clearly presents challenges, and it’s currently too early to gauge the impact it will have on demand.
“However, we believe the fundamental drivers of growth remain, and we expect the upward trajectory to continue. Indeed, unlike many other areas of the housing market, equity release has not stalled and the industry has adapted well to the challenges of social distancing and remote working.
“However, it must be made clear that equity release is not an ‘immediate needs’ product and therefore requires careful consideration. Much has changed since the start of the year, making it even more important to pause, take advice and avoid reacting hastily to financial concerns.”
Jonathan Barrett, partnerships director at digital retirement solutions fintech, ABAKA said: “While the equity release market is now facing the challenges posed by coronavirus and the impact of lockdown, there is a clearly still pent up demand from consumers for lifetime mortgages and other later life lending products.
“Advisers and providers will all need to be ready to manage that demand from consumers when we come to the end of this crisis, but the advice gap the sector is facing could prove to be a bottleneck.”
He added: “Recent rule updates from the Equity Release Council which now allow for remote advice mean advisers will be having to adapt more quickly to the digital world.
“Tools like AI-powered chatbots can also help support this transition by answering questions from potential customers, so that advisers can focus on supporting their clients through the equity release journey.”
This post has originally been featured in Property Wire.