Retired homeowners cashed in more than £3bn of property wealth last year via equity release, according to Key Retirement.

The total value of property wealth released in 2017 grew 40% on the previous year to £3.01bn. This is the fastest rate of growth on record and the sixth yearly increase in a row, according to Key’s 2017 Equity Release Market Monitor.

Homes paid out more than £8.2m a day last year to pensioners, with the average retired homeowner using £77,380 of property wealth.

The most popular use of the cash was to fund home and garden improvements, with 64% re-investing some or all of their money in their houses. 33% were using the money for holidays, while 24% were using it to help family and friends.

However, many used the money to clear debts with 22% paying off existing mortgages including interest-only capital repayments. Londoners cashed in the most taking an average £133,700 compared with less than £49,000 in Scotland.

Key Retirement chief product officer, Dean Mirfin, said: “More lenders are launching in the market in response to demand and that in turn is increasing competition, driving down rates and bringing new innovative features to the market.”