Older homeowners unlocked £636 million in property wealth in Q2 with 14,404 new and returning customers, according to the Equity Release Council’s latest quarterly market report.
This is a 10% increase in total lending compared to Q2 2024 (£578m) and was driven by new lump sum mortgage customers taking on average £126,422, or 14% more, than in Q2 2024 (£110,969).
That said, the figures did highlight a 4% quarterly drop in lending as borrowing in this sector mirrored challenges seen in the residential mortgage market due to ongoing economic uncertainty, changes to stamp duty and the later Easter holidays.
The number of plans taken out remained static quarter-on-quarter, but there was a slight increase in the volume of new plans (+2%) and total plans (+1%), when compared to 2024.
Further advances - which make up less than 7% of the total amount borrowed - saw a 40% annual rise in plans as existing customers chose to take advantage of house price increases and additional product flexibilities to borrow more.
The importance of flexibility was highlighted further with 55% of customers in Q2 deciding on drawdown products which allow homeowners to release an initial amount (an average of £65,856 in Q2) and agree a reserve facility (£53,338) for future use.
While product availability remained robust with over 1,669 plans for advisers to choose from at the end of June, the average APR was 7.24%. This is higher than in Q2 2024 (6.64%) as gilt yields continued to rise amid global economic uncertainty.
David Burrowes, chair of the Equity Release Council, said: "Today’s figures show a resilient equity release sector which despite challenging economic headwinds, has recorded 10% year-on-year growth in borrowing with the total amount released in Q2 2025 reaching £636m. Growth which continues to be driven by new borrowers accessing greater amounts of housing equity to manage debt, boost income and support their wider families.
“While the equity release market face some of the same challenges seen in the residential mortgage market, new lump sum and drawdown loans are up as customers take advantage of stable long-term house price growth to support their later life finances. An approach which is only likely to grow in the future with Fairer Finance predicting that by 2040, over half of UK households (51%) are expected to require housing wealth to support their spending needs in later life and retirement.
“The later life lending market will inevitably grow as more customers look to their housing wealth to boost retirement income and meet care needs. We need to be ready and resilient to build upon strong advice standards, product innovation and a commitment to support a wider range of customers as this provides significant opportunities for the market.
“We look forward to making the most of the opportunity presented by the recently launched FCA discussion paper into the ‘Future of the Mortgage Market’ which recognises the significant role of housing wealth in paying for retirement and that flexible lifetime mortgage products for older consumers are becoming ‘increasingly mainstream’.”
