An analysis by later-life finance specialists Key Group reveals ‘a sharp shift’ in how UK homeowners use equity release, with mortgage repayments now the dominant use for the funds – indicating a greater use of property wealth to stabilise household finances.
The data, which includes the cases of over 1000 Key Group customers agreed between Q2 2024 and Q1 2025, shows the proportion of customers using equity to cover mortgage repayments jumped from 36% in Q2 2024 to 63% in Q1 2025.
Allocations for other debts also increased, up from 2.7% to 9.1% over the same period. Freeing up funds for holidays increased from 3.2% to 7.6%, but other uses fell sharply: the proportion of customers using equity for home improvements decreased from 14% to 5%, property purchases were down from 7.9% to 2% and vehicle purchases fell from 7.7% to 3.9%.
Gifting fluctuated over the year, dipping to 5.6% in Q3 2024, rebounding to 12.4% in Q4 2024, and ending at 9.1% in Q1.
‘The picture is clear: equity release has become more about financial resilience’, Key Group said.
“Rising rates and ongoing cost-of-living pressures are pushing households to use some of their property wealth to manage essentials first (particularly mortgages) while deferring or reducing spending on many discretionary goals.
“This reinforces the view of equity release as a strategic financial tool and one that is increasingly being deployed to safeguard day-to-day financial stability.”
In Q1 2025, the average initial release rose for the first time in three years, up by 13.3% year-on-year to £62,930. The data also revealed the average equity release customer is 69 years old, and more women than men applied (592 and 423 respectively).
Two-thirds of customers split their release across more than one purpose, with a third (31.6%) using their plan for a single purpose, 32.7% dividing funds across two purposes, 21.6% across three, and 9.5% allocating funds to four or more priorities.
‘Homeowners appear to be taking a pragmatic, two-part approach’, said Rachel East, senior director of later life advice at Key Equity Release.
“Using equity release first to secure essentials and ease immediate financial strain, while still setting aside modest sums for holidays, family gifts and other quality-of-life spending. It’s a shift from optional projects toward careful prioritisation.”
The highest equity release was in London, where customers release an average of £145,471 per plan in 2025 – more than double the UK regional average and a jump of more than £27,000 on the year before.
