Total Lending Rises for Fourth Successive Quarter

Double Digit New Customer Growth Pushes 32% YoY Increase in Total Lending

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 growth¹ (+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.

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.”

ENDS

1 = Halifax House Price Index – March 2025

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 950,000 homeowners have accessed £50bn 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; payments are fixed for each release of funds in a lifetime mortgage or if a variable interest rate is offered, there must be a fixed upper limit for the life of the loan; 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  email [email protected]