Equity release industry data for final quarter of 2023 is published

Latest data from the Equity Release Council

The latest quarterly market report from the Equity Release Council shows a fall in market activity compared to the previous quarter. Even so, 13,651 UK homeowners aged 55+ took a release from their property in Q4 of 2023.

That is a dip of 20% from Q3 2023 – making October-December 2024 the lowest of the year for equity release transactions. However, industry experts are talking of a return to stability and even growth in the market.

It’s no surprise that the size of the equity release market has reduced in recent times. David Burrowes, Chair of the Equity Release Council, explains: “Every corner of the mortgage market saw rising interest rates put the brakes on activity in 2023, and equity release was no exception with customers and their advisers taking a cautious approach.”

But despite the challenging market conditions, across the whole of 2023, there was total equity release lending of £2.6 billion. This demonstrates that equity release is still helping thousands of people each year to access money tied up in their property.

Customers prefer drawdown plans

Let’s take a look at the market data for last year in more detail. For example, the final quarter of 2023 saw the lowest activity for that year, but the third quarter of the year saw an 8% increase in lending. It will therefore be interesting to see what happens in the first three months of 2024.

Also, there is a trend for interest in drawdown equity release. The number of existing customers accessing money through their drawdown facility was up 3% from Q4 of 2022. 

The Equity Release Council has also reported an increasing interest in drawdown lifetime mortgages  These let homeowners take an initial lump sum release of equity, followed by ‘drawing down’ additional cash instalments over time. They say that 55% of new customers chose a drawdown plan in Q4 2023 – compared to 47% in Q4 2022.

As well as flexibility, this type of plan has advantages over traditional lump sum lifetime mortgage when it comes to interest costs. Interest doesn’t mount up as quickly and the overall cost of the loan is typically lower. Also, customers may choose to take some money now, and then release further amounts at a lower interest rate should rates fall in the future.

Response from the equity release industry

Quoted by Mortgage Strategy, L&G Home Finance chief executive Craig Brown said: “Last year was challenging for homeowners for many reasons, resulting in a significant downturn in the equity release market, but I’m proud the later-life lending industry has shown resilience and pushed forward with innovation. 

“Customers have been cautious, but there are signs that the market is stabilising. House prices are still significantly higher than pre-pandemic figures (18% up from the end of 2019), so property still represents an important asset for homeowners to consider as part of their long-term financial planning.”

Meanwhile, The Intermediary quoted optimism from Mark Gregory, founder and CEO of Equity Release Group: “We are seeing the green shoots of recovery, with advisers feeling a renewed sense of confidence following consumers’ appetite for greater lifestyle purchases, as opposed to just debt consolidation mortgage repayments.

“Whilst the next few months are still going to be tough and present challenges for the industry, we’re heading in the right direction to get back on track.”

Can we help with your equity release enquiry?

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 Richard Groom. A writer with 20+ years’ experience across several sectors including financial services, Richard has a passion for writing clear and simple content on even the most complex of subjects. In his spare time, Richard loves exploring the hills and mountains of the UK on long walks with his faithful cocker spaniel. Follow Richard on LinkedIn