Equity release market shows signs of recovery

Lending rises for third straight quarter as consumer confidence returns

Equity release market shows signs of recovery

The UK equity release market showed signs of recovery in the final quarter of 2024, with more than 15,000 customers actively using equity release products — the highest level in over a year, according to the Equity Release Council’s latest market report.

Total lending increased for the third consecutive quarter, reaching £622 million in Q4 2024, a 16% rise from £525 million in the same period a year earlier. Annual lending for 2024 totalled £2.3 billion, down from £2.6 billion in 2023.

While Q4 2023 was the slowest quarter for lending that year, the final quarter of 2024 showed a shift, suggesting renewed consumer confidence and gradual market recovery.

Average loan sizes for both drawdown and lump sum lifetime mortgages continued to grow, supported by a 3.3% increase in UK house prices over the past year.

Product availability also improved, with new equity release products launched in October 2024 offering lower interest rates. The average annual percentage rate for these products fell to 6.47%, down from 7.48% a year earlier, based on data from Advise Wise.

Despite this, 56% of new customers opted for drawdown plans instead of lump sums, indicating that many are waiting to see if interest rates drop further before accessing additional funds.

The Equity Release Council’s market data aggregates figures from all UK equity release providers, reflecting activity across the entire market.

“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,” commented David Burrowes (pictured far left), chair of the Equity Release Council. “This is a testament to the resilience of the market and its ability to adapt to shifting economic conditions.”

Burrowes also pointed to a 27% rise in returning customers taking further advances, reflecting increased homeowner confidence in accessing property wealth.

Lorna Shah (pictured second from left), managing director at Legal & General Retail Retirement, pointed out that property remains a crucial asset for many retirees.

“For many, a property is the most valuable asset a person owns, both in terms of financial and sentimental value,” she said. “Legal & General’s data analysis suggests that accessing property wealth could provide an additional five years’ worth of retirement income for some retirees.”

Releasing equity is a significant financial decision,” added Sadna Zaman (pictured centre), proposition development manager at Canada Life. “So, it is paramount to consult a professional financial adviser to ensure the product meets your needs.”

Leon Diamond (pictured second from right), chief executive at LiveMore, meanwhile pointed out that equity release is just one of many later life lending options.

“These are really positive numbers for the equity release sector,” Diamond said. “However, it is worth highlighting that these figures refer solely to equity release lending and not to any of the other products available to people aged 50 to 90-plus, such as standard capital and interest, interest-only and retirement interest-only mortgages.”

He pointed to LiveMore’s own lending figures, which doubled year-on-year, suggesting broader growth across the later life lending sector.

Similar to findings from the Equity Release Council, Mark Gregory (pictured far right), founder and chief executive of Equity Release Group, said they have also seen an increase in demand during the final quarter of 2024.

“We’ve seen a sharp rise in lead figures, which rose by over 30% in comparison to 2023, as well as an increase in applications, which grew by 16% year-on-year,” Gregory revealed. “Optimism did return in the second half of last year… I believe there will be even more appetite and heightened growth.”

“The final figures of 2024 show that the equity release market has turned a corner, and there is cause for optimism,” Burrowes added. “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.”  

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