An estimated £884m was released in equity in the third quarter of 2020, according to Key’s Market Monitor.

This is up on Q2, which saw £521m released in equity.

However, Q3 2020 figures are in line with Q3 2019, with £887m released in equity in the third quarter of last year.

Motivations of those seeking equity release revealed

Older homeowners on average released close to £83,000 in property wealth during Q3 2020, up from £75,300 in the third quarter of 2019.

The data also revealed that the number of customers has fallen by 9% year-on-year, from 11,772 in Q3 2019, to 10,671 in Q3 2020.

Key believes this is due to clients focusing on essential spending such as debt repayment and supporting their wider families.

Looking to why individuals released equity, 47%, equating to £415m, did so in order to clear debt, while 25%, £221m, used the money to support friends and family.

A further 11%, £97m, released equity in order to improve their properties, and 3%, £26m, used the money towards holidays.

On a regional basis, Northern Ireland saw the greatest annual decline on the number of equity release plans taken out, down 43%.

Meanwhile, Scotland noted the largest increase between Q3 2019 and Q3 2020 in the quantity of plans, up 8%.

Will Hale, chief executive at Key, said: “In Q3, we saw a return to more normal market conditions driven by many customers looking to make their finances more robust by reducing their outgoings and/or supplementing their income.

“While the payment holidays offered by big residential lenders have certainly benefitted many, older borrowers who either fear redundancy and a tough climb back into work or early retirement have looked to use equity release to reduce the financial pressure they are feeling.

“Others have seen the stamp duty holiday as the ideal time to help younger relatives onto the property ladder. The market is maturing and is now very much focused on essential rather than discretionary spending.”

“While it is hard to predict what the market might look like at the end of 2020, what we can say is that demand remains strong and now more than ever there is a focus on providing the right type of advice for customers.”