The equity release market had a strong start to 2025 with £665m worth of housing equity accessed by customers during the first quarter.
This is according to the Equity Release Council’s latest quarterly market report which reveals a 32% increase in total lending when compared to Q1 2024 (£504m) and the fourth successive quarter of growth witnessed in this sector.
Growth has been propelled by a marked 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).
Commenting on the latest data, Standard Life Home Finance head of sales Phil Quinn said: “The increase in the average lump sum released takes it to levels last seen before the disastrous mini-Budget, which is a good indication of confidence returning to the later life market. However, it also highlights the increased costs that people are facing in later life, given the significant growth in the cost of living in that time, which is necessitating larger releases.”
L&G managing director, retail retirement Lorna Shah agreed that the data painted an encouraging picture of the later life lending market for the year so far. “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.”
Pure Retirement’s head of distribution Scott Burman said: “Annual growth in borrowing amounts across all product types, and across both initial and further borrowing, demonstrates the way that lifetime mortgages are catering to a diverse audience – as also evidenced by our own findings, which found that in Q1 9% of business came from owners of properties valued at £850,000 and above.”
