Annual growth of £198 million in equity release lending between the first halves of 2015 and 2016 is the highest level seen for over a decade, according to the Equity Release Council.

Consumer demand for releasing housing wealth to help fund later life is continuing to grow, with lending in the second quarter of 2016 exceeding £500m for the first time and setting a record for the highest quarterly lending total.

The rise has come at a time when more providers and products have appeared on the market. Research by Moneyfacts in March showed the range of equity release products has grown by 34% year-on-year and more than doubled compared with three years ago.

Increasing competition has also had a positive impact on product pricing. While continuing to offer additional guarantees and protections, average lifetime mortgage rates fell further than any other category of mortgage products during the first half of the year with an increasing number of sub-5% rates available.

Drawdown lifetime mortgages remained the most popular product choice in 2016, with 67% of new plans falling into this category. This continues the trend seen over the last five years.

For the second successive half-year period, market data indicates over 50% of new plans allowed customers to make voluntary repayments up to a certain value – typically 10% per annum – without an early repayment charge. This option helps customers limit the total amount owed over the lifetime of the loan, as does the option with some products to make regular interest payments without risking default and repossession because customers can revert to roll-up interest at any point.

Another emerging feature being offered by some providers is downsizing protection. This typically allows the loan to be repaid in full without the requirement to pay an early repayment charge if this is done in conjunction with moving to another property, providing the loan has been running for at least five years.