The Equity Release Council’s latest quarterly market report for Q1 2025 showed that the market had a strong start to the year with £665m worth of housing equity accessed by customers.
This is a 32% increase in total lending when compared to Q1 2024 (£504m) and the fourth successive quarter of growth recorded by this market.
Market growth has been driven by a significant increase in new customers (+14%) taking lump sums supported by improved product choice and positive annual house price growth (+2.8%).
The number of plans taken out remained relatively static year on year (+1%) and fell slightly quarter on quarter (-5%) as the number of customers taking drawdowns (-7%) and further advances (-6%) reduced.
The average amount borrowed by the 47% of customers (44% – Q4 2024) who chose a lump sum product was £127,414. This is up 11% on the previous quarter and up 23% on the same time last year as homeowners chose to access their housing equity to repay mortgages, future proof their homes and improve their standard of living.
While product availability remained good with over 1,200 plans for advisers to choose from, the average APR of new products launched in the first three months of the year was higher than those recorded in 2024 (7.15% vs. 6.67% in Q1 2024, according to data from Advise Wise). Gilt rates which govern the interest rates of equity release products have been steadily rising since January 2024 as investors look for guaranteed returns amid global economic uncertainty.
| Average loan sizes | Quarterly change | Annual change | ||
| New lump sum | £127,414 | 11% | 23% | |
| New initial drawdown | £69,764 | -2% | 17% | |
| New drawdown reserve facility | £61,194 | 8% | 11% | |
| Returning drawdown | £13,872 | 21% | 8% | |
| Lump sum further advance* | £32,621 | 3% | 93% | |
| DD initial further advance* | £27,125 | 6% | 18% | |
| DD further advance reserve facility* | £6,753 | -2% | 2% | |
| Product choice among new customers | Drawdown: 53% | Lump sum: 47% | ||
| * = the number of customers taking further advances are very low so the figures are highly volatile. | ||||
The Council’s data is unique in that it is made up of aggregated figures collected from all UK equity release providers, encompassing business from advice firms across the market. Commenting on the data, David Burrowes, chair of the Equity Release Council, said:
“The Council’s market data shows that the equity release sector has seen its fourth consecutive quarter of growth in total lending and a 32% increase in the amount borrowed compared to the same time last year. Growth which has been driven by more new borrowers accessing greater amounts of housing equity to manage mortgage debt, boost income and help their wider families.
Fewer existing customers accessed drawdown or requested further advances as older homeowners adopted a cautious approach to additional borrowing given the current world economic climate. Gilt rates which govern interest rates on lifetime mortgages have been steadily increasing since January 2024 which has impacted rates but lenders are working to mitigate this by encouraging the use of flexibilities such as the ability to make ongoing repayments.
Q1 typically sets the agenda for the remainder of the year and the figures released today are a testament to the resilience of the market and its ability to adapt to consistently shifting economic conditions. With the FCA due to launch a public consultation into lending into later life in June, this sector is likely to be in the spotlight for much of 2025 and today’s figures highlight its growing momentum as lenders, advisers and lawyers work together to support customers.”
Lorna Shah, Managing Director, Retail Retirement, L&G, said that the data paints an “encouraging picture” of the later life lending market for the year so far. She added:
“The rise in total lending, which has carried into a fourth consecutive quarter, suggests that equity release is becoming a more mainstream option for those looking to boost their retirement income by tapping into their property wealth.
We know that many retirees are not able to maintain the lifestyle they want with their existing pension pots alone. Seeking financial advice can ensure those retirees can take a holistic view of all of the options available to them.”
Leon Diamond, founder and CEO at LiveMore, said that these figures “only represent equity release – one piece of the full later life lending picture”. She continued:
“…which is also showing significant growth (data from UK Finance shows the value of later life lending was £5.6bn in Q4 2024, up 38.6% compared with the same quarter a year previously).
Later life lending is a broader market than equity release, offering everything from Retirement Interest Only and standard interest-only to capital & interest repayment and term-based borrowing to meet the diverse and evolving needs of the 50+ market. At LiveMore, we offer a full range of later life mortgage products — including but not limited to equity release — so older borrowers can explore all their options with confidence and peace of mind.”
