Retired homeowners raised a record £300m on the strength of their property through equity release plans over the past three months, new figures showed yesterday.

Experts attributed the growth to rising house prices which have left older people sitting on increasingly valuable assets, and more people retiring on inadequate pensions.

The trade body Safe Home Income Plans (Ship), which represents 90% of the equity release sector, said more than 7400 plans were taken out during the three months to the end of June, 16% more than during the same period a year earlier.

The total value of the new business was £302.3m, the highest figure to date, and an increase from £262.8m in the same period in 2006.

Ship said the figures contributed to a record half-year for both the number of new equity release plans taken out and the value of new business.

During the first six months of this year 14,224 new plans were sold, 11% more than during the same period a year earlier, worth a total of £596.2m. That total represents a 10% rise on the first half of 2006.

Equity release enables retired homeowners to realise the value of their homes without having to move, either by selling part of the equity to a home reversion company for a lump sum, or by taking out a lifetime mortgage against the value of their home, with the mortgage not repaid until they die or move house.

Ship said the popularity of drawdown mortgages, which enable people to unlock cash in stages, continued to grow during the quarter. These plans now account for 47% of all new business, compared with just 21% during the same period of last year.

Research by equity release intermediary Key Retirement Solutions also showed the equity release market was enjoying strong growth.

The group said demand for equity release plans had increased by 18% during the first six months of the year, while the money unlocked jumped by a third to £660m.

It also saw a strong rise in demand from consumers for drawdown mortgages, with the number of these loans taken out rising by 225% to account for 44% of all new plans.

But at the same time the number of people taking out home reversion plans, under which they sell a proportion of their home, fell to account for just 6% of new business.

Separate figures published by the Key Retirement Solutions indicate that £24m of equity was released from homes in Scotland in the first half of this year.

Its UK Equity Release Market Monitor showed strong house price growth was accompanied by a 233% increase in demand for equity release plans, while the total amount released by consumers had increased by 165% Those who use equity release are sometimes referred to as Skiers (spending the kids' inheritance) but according to Dean Mirfin, Business Development Director at Key Retirement Solutions, it may be driven by necessity. He said: "The more recent volatility within the housing market, fluctuations in the base rate and soaring costs associated with moving home, such as stamp duty, has also meant that a lot of people have stayed put in their homes for longer. As a result more people need cash to improve, change and modernise existing homes."

In the nine years that Key Retirement Solutions has been monitoring the equity release market, now (January-June 2007) is the first time the average age of an equity release client has fallen, from 71 years to 70. This is mirrored in Scotland where the average age of an equity release consumer in the first half of the year was 70.

Mr Mirfin said: "We strongly believe that this is an indication of how the market will continue to change. While this trend reflects the greater availability of equity release plans from 55 years (previously the minimum was typically 60), it is also indicative of the fact that fewer people are retiring on good pensions and final-salary benefits, and we predict more people will need to supplement their pensions at an earlier age - many using assets held in their home to do so."