Equity release advances were up ten per cent year-on-year in the first quarter of 2012, new research has shown.

SHIP, the trade body for equity release providers, has revealed that advances by its members reached £199.1 million in the first three months of the year, compared to £181.6 million in the same period of 2011.

The number of plans also increased to 4,057 in the first quarter, a rise of six per cent from the 3,838 sold during the start of 2011. 

The proportion of customers opting to access their equity in small amounts is also on the rise, with drawdown mortgages now accounting for 67 per cent of the market.

This represents a rise of five per cent from the first quarter of 2011 and is likely to be the result of more UK consumers opting to use equity release to supplement their monthly income, rather than pay for one-off goods and services.  

Lump sum mortgages (32 per cent) and home reversions (two per cent) accounted for the remainder of the equity release market.

Andrea Rozario, director general of SHIP, was extremely encouraged by the figures as they show that the market is continuing to grow steadily each year.

She said: "The increase in the number of customers electing to drawdown their housing wealth in stages reflects the growing awareness for the different uses of housing equity - such as supplementing an existing income.

"These figures show that there is a growing appetite amongst consumers for equity release products and by bringing together organisations from across the industry we will ensure that we are well placed to meet this demand."

Ms Rozario added that 2012 is a "significant and exciting" year for SHIP as the body is set to expand its membership to include organisations from across the equity release industry.

This will allow SHIP to provide an even more comprehensive look at equity release sales figures in the future as it can now use a wider pool of figures to compile its research.