THE amount of money retired homeowners are unlocking from their properties has soared by 26 per cent during the past year to break through the £1 billion barrier.

More than 22,606 equity release plans were taken out during the first nine months of 2007, 10 per cent more than during the same period of 2006, according to equity release intermediary Key Retirement Solutions.

At the same time the collective value of the schemes has soared by 26 per cent to £1.04 billion.

Equity release enables retired homeowners to unlock money tied up in their homes without having to move.

They can do this either by taking out a mortgage which is not repaid until they move or die, or selling part of their property to a home reversion company, which keeps that portion of the sale price when the home is finally sold.

Key Retirement Solutions said demand for drawdown policies, which enable homeowners to unlock the money they need in stages, continued to increase in popularity.

This type of loan now accounts for 48 per cent of all equity release schemes taken out during the first nine months of the year, up from just 19 per cent last year.

Business development director at Key Retirement Solutions Dean Mirfin said: "The report shows that demand for equity release continues to grow in all regions of the UK, despite the volatility in the credit markets and speculation over movements of the base rate over the last few months.

"While rates for some products have increased, borrowers have been able to take advantage of some very competitive deals, particularly if they seek advice from a specialist adviser.

"Conditions in the market remain positive, and we expect that the last quarter will produce strong results."

The age of people unlocking equity from their homes is continuing to fall, with the average homeowner taking out one of the plans now aged 68, down from 70 in 2006.

The average value of a plan taken out has increased slightly year on year, rising from £42,126 in 2006 to £48,957 this year.

Demand for equity release continues to be strongest in the South East, where more than 4,780 plans were taken out during the first nine months of the year, followed by the North West and the South West.

In terms of value, retired homeowners unlocked £260m in the South East, £150m in the South West and £149m in London.