For the final quarter of 2024 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 extensions to existing plans.

This is according to the the Equity Release Council’s (ERC) latest quarterly market report . The report also reveals that 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.

Resilient ERC market 

Commenting on the data, ERC chair David Burrowes 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.”

He added: “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.”

LiveMore chief executive Leon Diamond said: “These are really positive numbers for the equity release sector. It is worth highlighting, though, that these figures refer solely to equity release lending and not to any of the other wider products available on the market to people aged 50 to 90 plus, such as standard capital and interest, interest-only and retirement interest-only.”

Canada Life Proposition Development Manager, Home Finance Sadna Zaman said that despite an overall reduction in total annual lending in 2024, the Equity Release Council’s latest market report indicated early signs of growth of the equity release market.

“This increase in customer activity could be driven by growth in UK house prices – a 3.3% rise according to the latest UK House Price Index. In addition, with greater product innovation and more flexible options available, customers may be feeling a renewed confidence in the market.”