Equity release market ends 2024 on the up!

More than 15,000 customers active in one quarter for the first time in over a year

Total lending rose for third successive quarter

The Equity Release Council’s latest quarterly market report for Q4 2024 shows that more than 15,000 customers were active in the equity release market for the first time in over a year since Q3 2023, either agreeing new plans, taking drawdowns from existing plans or agreeing further advances (extensions) to existing plans.

Total lending also rose for a third successive quarter to £622m, up by 16% from £525m Q4 2023. It meant that total annual lending for 2024 reached £2.3bn, compared with £2.6bn the previous year.

However, while Q4 was the most subdued quarter of 2023 for lending activity, the opposite was true in 2024 in an encouraging sign of modest momentum building with returning consumer confidence.

Average loan sizes continued to increase for both drawdown and lump sum lifetime mortgages, helped by customers’ available equity being lifted by a 3.3% rise in average UK house prices over the last year according to the latest UK House Price Index.

Equity release product availability has also improved over the last year, with the average APR of new products launched in October 2024 more than one percentage point lower than a year earlier (6.47% vs. 7.48%, according to data from Advise Wise).

However, with 56% of new plans being drawdown rather than lump sum, customers are clearly holding out for the potential to make future drawdowns at lower rates if pricing continues to fall.

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 Q4 2024 data demonstrates encouraging signs of recovery in the equity release market, with three consecutive quarters of growth in lending and total plans for the first time in two years. This is a testament to the resilience of the market and its ability to adapt to shifting economic conditions.

“It’s particularly notable to see a steady increase in returning customers using further advances, with a 27% rise this quarter, reflecting the confidence that homeowners have in leveraging their property wealth responsibly. This is further supported by the gradual rise in UK house prices, which has given many customers the opportunity to access sufficient equity to meet their financial needs.

“As consumer demand stabilises, the industry will continue to support older homeowners needs through product innovation and flexibility.  The average loan sizes of initial drawdowns have grown by 8%, with customers making use of reserve facilities to manage borrowing efficiently over time. This demonstrates the versatility of equity release in addressing diverse financial goals, from home improvements to supplementing retirement income.

“The final figures of 2024 show that the equity release market has turned a corner and there is cause for optimism. Interest rates have started to settle and if the growth seen in 2024 continues to gain momentum, 2025 will see more customers considering the option to access their housing equity using an increasingly diverse range of innovative products.”

ENDS

To read the full report click here.

About the data:

The Council’s market data is compiled from actual whole-of-market returns and is not estimated nor grossed up, making it the UK’s definitive equity release data. All data has been collated by the Council, unless otherwise stated.

About the product: Equity release allows older people to access the wealth in their homes, without necessarily having to sell or move. Lifetime mortgages make up more than 99% of the market. They enable people to borrow against their homes without making repayments unless they choose to. The loan and interest, or part thereof, is paid when the customer dies or goes into long term care. Since 1991, more than 675,000 homeowners have accessed £49bn of property wealth via Council members to support their finances.

About the Council: The Council is the representative trade body for the UK equity release market. Plans that meet the Council’s standards come with five product safeguards: no negative equity guarantee; fixed or capped rates for life; the right to port; the right to make overpayments; and secure tenure for life. These safeguards are underpinned by mandatory independent legal advice which ensures the customer understands the risks and implications of the plan.

More information: Visit www.equityreleasecouncil.com; call Lee Blackwell, Director of Communications and Marketing at the Equity Release Council on 07950798072; email [email protected]