The equity release market grew by 10% in the last 12 months as older homeowners unlocked £636m in property wealth according to the latest Equity Release Council’s (ERC) latest quarterly market report.
14,404 new and returning customers took out equity release loans in Q2 2025; a 10% increase in total lending when compared to Q2 2024 (£578m) driven by new lump sum mortgage customers taking on average £126,422 or 14% more than in Q2 2024 (£110,969).
Further advances – which make up less than 7% of the total amount borrowed – saw a 40% year on year increase in plans as existing customers chose to take advantage of house price increases and additional product flexibilities to borrow more say the ERC.
Although the equity release market was impacted much less by challenges seen in the residential mortgage market due to ongoing economic uncertainty, changes to Stamp Duty and the later Easter holidays, there was a 4% quarter on quarter drop in overall lending, and only a 2% increase in new plans and 1% increase in total plans compared to 2024.
| Overall activity – Q2 2025 | Quarterly change | Annual change | |
| Total lending | £636m | -4% | +10% |
| Total plans | 14,404 | 0% | +1% |
| New plans | 5,319 | 0% | +2% |
| Returning drawdowns | 7,640 | -1% | -5% |
| Further advances | 1,445 | +9% | +40% |
And continuing global economic uncertainty saw average APR at 7.24% in Q2 2025, compared to 6.64% in Q2 2024 as investors look for guaranteed returns say the ERC.
Commenting on the data, 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’.”
