Total equity release lending increased in the first quarter of the year following a sharp rise in plan sales, new research has shown.

A retirement specialist has published new figures which show that total lending reached £217.1 million in the first three months of the year, a rise of 1.7 per cent from the same period in 2011.

Plan sales rose 6.4 per cent to 4,508 in the first quarter, compared with 4,237 for the three-month period of 2011.

The rapid rise in plan sales, which grew at nearly four times the rate of total lending, highlights how the use of drawdown is driving growth across the equity release market.

Figures from Key Retirement's report show that £83.8 million of drawdown funds were not used in the quarter, with drawdown sales accounting for 66 per cent of total sales in the first quarter.

Over half (57 per cent) of equity release customers used the funds to finance home and garden improvements, while a third used the money to clear debts.