An industry group has claimed that the loans are bearing up, despite falling house prices.
Equity release is "resilient" despite the credit crunch and economic downturn, industry association Safe Home Income Plans (SHIP) has claimed.
New figures for January-March 2009 have been released by the body, showing that the average loan amount has grown by 16 percent since January-March last year. In all, the typical loan came to £48,287.
Equity release loans are borrowed by homeowners against the value of their home. They are popular among retirees, who have paid off their mortgages already and are keen to boost their income due to insufficient pensions.
SHIP suggested that the rise in loan amounts was due to the falling returns from stocks, cash savings and pensions caused by the downturn. However, the general decline of house prices - with the value of the typical property 15 percent down in a year according to separate surveys from lenders - in the credit crunch has also eaten into the amount of equity stored in homes. It also appears to have damaged the equity release sector, with SHIP saying that the number of loans sold to customers has fallen by 14 percent to 5,074 over the last 12 months.
Andrea Rozario, director general of SHIP, commented: "It is encouraging to see how resilient the equity release market is, especially when you consider the fact that consumers have become increasingly cautious about borrowing and the performance of the financial services sector as a whole."
She added: "The relative stability of the market in such turbulent financial times is very pleasing. There remains a clear need for equity release products, which is becoming ever more important as pensioners feel the pinch from the recession."
