New data shows equity release customers at highest level since 2023

Equity release market shows signs of growth

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The latest market report from the Equity Release Council shows that total lending and customer numbers are the highest for some time.

The data for the 4th quarter of 2024 reveals that over 15,000 customers were active in the equity release market, marking the first time this milestone has been reached in over a year. This includes homeowners taking out new plans, accessing further funds from drawdown plans, or agreeing further advances (extensions) to existing plans.

Additionally, total lending in the quarter climbed to £622 million, up by 16% compared to the same period in 2023. This capped off a year in which total annual lending reached £2.3 billion.

Drawdown plans remain a popular choice

The report highlighted that 56% of new plans are drawdown lifetime mortgages, where customers take smaller amounts initially with a reserve available for future withdrawals. 

Drawdown is a popular option for equity release customers looking for the potential to benefit from any future drops in interest rates. This is because the interest that applies to each withdrawal is determined by the rate available at that time.

Why are more people turning to equity release?

David Burrowes, Chair of the Equity Release Council, explained that the data reflects “encouraging signs of recovery” in the market. 

The Equity Release Council says that one factor boosting consumer interest is the steady rise in UK house prices. According to the UK House Price Index, over the last year house prices increased by 3.3%, providing homeowners with more equity to unlock. 

In the same twelve months, average loans via lump sum lifetime mortgages increased to £115,243 – a 14% rise. The average size of initial releases from new drawdown plans also rose by 14%, to £70,926

Activity levels among existing drawdown customers saw the most significant growth. There was a 27% rise in the last three months of the year and a 35% increase year-on-year, in terms of the number of customers taking further withdrawals from their drawdown plans.

Lower interest rates

The Council’s report also looked at what happened to equity release interest rates in Q4 of 2024. Average rates for new products launched in October 2024 dropped to 6.47%, more than a full percentage point lower than a year earlier when it was 7.48%.

David Burrowes said that 2024’s final figures show the market has “turned a corner”, adding: “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.”

Is equity release right for you?

Equity release products have become more flexible in recent years, with lenders introducing innovative features to meet varying customer needs. This includes options like interest-only lifetime mortgages and the option to make voluntary ad hoc payments to reduce the overall loan size. 

For those already benefiting from equity release, product innovation could mean that you have opportunities to access more equity or enjoy more flexibility if you switch to a new plan. However, you should take advice and weigh up all the costs of such a decision, as well as potential advantages.

Whether you’re exploring equity release for the first time or considering unlocking further funds from an existing plan, seeking the advice of a specialist in the equity release market is essential. They can answer all your questions and explain all the pros and cons to you.

If you’re ready to learn more about how equity release could work for you, speak to one of our selected advisers today. Get a free quote online or calling 0808 178 3055 or request a call back to talk to an adviser.

Source

Equity release market data: Council publishes Q4 & FY 2024 lending figures. Equity Release Council. Accessed 06 February 2025. 

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