2024 starts with 4% rise in equity release activity

4% increase in equity release activity in Q1 2024

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The latest quarterly market report from the Equity Release Council has been released – and it shows a rise in market activity compared to the previous quarter. 

According to the report, a total of 14,216 new and returning UK homeowners aged 55+ boosted their finances with equity release between January and March of 2024.

That’s a 4% uptick on Q4 2023, when 13,651 customers accessed some of their property wealth with a plan. Despite the total number of customers increasing in the first quarter, the number of new customers coming to the market actually fell to 4,698. This is an 11 per cent drop from the number of new customers in Q4 2023.

Explaining the numbers, David Burrowes chair of the Equity Release Council says: “New customer numbers are lower than last year with feedback from the market suggesting that older homeowners are adopting a more cautious approach to borrowing as there are hopes of interest rate reductions in the near future.”

First quarter sees boom in drawdown products

Despite the drop in new customers, the Equity Release Council reports a 6% increase in drawdown lifetime mortgage activity, driven by returning customers. These plans let homeowners take an initial lump sum of cash, with further funds being ‘drawn down’ as and when needed from a ring fenced sum of money.

As interest only applies to the money withdrawn from the fund, it doesn’t mount up as quickly as a single lump sum plan, so the overall cost of the loan is typically lower. 

With rumours of an interest rate cut coming soon, having a drawdown plan means customers can choose to take some money now, then release further amounts at a lower interest rate should rates come down in the future.

The report reveals that in the first quarter of 2024, 56% of new lifetime mortgages were drawdown plans. In contrast, lump-sum lifetime mortgages dominated the market in 2022, when 52% of new customers chose this option. 

Furthermore, each returning drawdown customer unlocked an average of £12,822, a 9% increase from £11,782 in Q4 2023.

Burrowes said: “As we look to the rest of 2024, we are confident that the green shoots that we are starting to see will germinate and the market will return to growth.”

Despite the challenging market conditions, there was total equity release lending of £504 million in the first three months of this year. It shows how equity release is still helping thousands of people to access their tax-free money tied up in their property.

The industry responds to Q1 2024 figures

Quoted by Mortgage Strategy, L&Gl Retail Retirement managing director, Lorna Shah, remarks: “While market conditions have made some new customers more cautious of borrowing, existing customers have confidently made use of their drawdown facilities.  

“We expect that equity release will be considered as more of a mainstream product in the future, alongside pensions, as customers look for more holistic options to fund their retirement goals.”  

Do you want to discuss the option of equity release?

If you are thinking about tapping into your property wealth with equity release, then do get in touch. Call us on 0808 178 3055 and we’ll arrange a free, no-obligation appointment with one of our selected advisers, who will confirm your eligibility for equity release and look for the best equity release rates from leading providers. 

If you’re unable to talk now, request a call back and we’ll call when it’s convenient to you. You can also get a quick estimate of how much money you could unlock from your home with our free equity release calculators.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn