Later life borrowers unlock £636 million in property wealth in Q2
Older homeowners in the UK accessed £636 million in property wealth through equity release products in the second quarter of 2025, according to the latest quarterly market report from the Equity Release Council.
The data showed 14,404 new and returning customers during the period, reflecting a 10% increase in total lending from £578 million in the same quarter last year.
The rise was largely attributed to new lump sum mortgage customers, who withdrew an average of £126,422—14% more than the average amount in Q2 2024 (£110,969). Despite the annual growth, lending fell by 4% from the previous quarter, mirroring trends in the wider residential mortgage market. The council cited ongoing economic uncertainty, changes to Stamp Duty, and the timing of the Easter holidays as contributing factors.
The number of equity release plans taken out remained steady quarter-on-quarter. However, there was a slight uptick in both new plans (up 2%) and total plans (up 1%) compared to the previous year. Further advances, which account for less than 7% of the total borrowed, saw a 40% year-on-year rise in the number of plans, as existing customers leveraged higher house prices and more flexible product options.
The Q2 2025 Lending Figures report showed that drawdown products continued to be popular, with 55% of customers in Q2 2025 choosing this option. These products allow homeowners to release an initial sum — averaging £65,856 in the quarter — and set aside a reserve facility, which averaged £53,338 for future use.
Product availability remained strong, with more than 1,669 plans available to advisers at the end of June. The average annual percentage rate (APR) for equity release products was 7.24% in Q2 2025, up from 6.64% a year earlier, as rising gilt yields pushed interest rates higher amid global economic uncertainty.
Industry leaders noted that the figures reflect both growing consumer confidence and evolving customer needs.
“Today’s figures show a resilient equity release sector which despite challenging economic headwinds, has recorded 10% year-on-year growth in borrowing with the total amount released in Q2 2025 reaching £636 million,” said David Burrowes (pictured centre), chair of the Equity Release Council. “Growth which continues to be driven by new borrowers accessing greater amounts of housing equity to manage debt, boost income and support their wider families.
“While the equity release market face some of the same challenges seen in the residential mortgage market, new lump sum and drawdown loans are up as customers take advantage of stable long-term house price growth to support their later life finances. An approach which is only likely to grow in the future with Fairer Finance predicting that by 2040, over half of UK households (51%) are expected to require housing wealth to support their spending needs in later life and retirement.”
For Paul Carter (pictured left), chief executive at lifetime mortgage lender Pure Retirement, the figures continue to paint a positive and hopeful picture for the rest of the year and beyond.
“To see a 10% annual uplift in lending amounts, amid the uncertainty that has come following a raft of major geopolitical events over the last three months, shows the belief and confidence that consumers have in later life lending as a tool to achieve their financial goals,” he said.
“Our own Q2 figures highlighted that 12% of new customers came from owners of properties worth at least £700,000, underlining the diverse range of needs the sector continues to meet, and all the signs remain pointed towards ongoing and sustainable market growth from a customer-centric sector that continues to become a more mainstream proposition.”
Burrowes also believe that the later life lending market will inevitably grow as more customers look to their housing wealth to boost retirement income and meet care needs.
“We need to be ready and resilient to build upon strong advice standards, product innovation and a commitment to support a wider range of customers as this provides significant opportunities for the market,” he added.
“We look forward to making the most of the opportunity presented by the recently launched FCA discussion paper into the ‘Future of the Mortgage Market’ which recognises the significant role of housing wealth in paying for retirement and that flexible lifetime mortgage products for older consumers are becoming increasingly mainstream.”
Lorna Shah (pictured right), managing director of retail retirement at Legal & General, agreed that “equity release is being seen as a more mainstream product for people looking to achieve their later-life goals.”
“As a lender, we work closely with advisers and the broader industry to ensure customers make informed choices based on their personal circumstances,” she said. “While not suitable for everyone, it's important to have a holistic conversation around financial planning in retirement; considering property wealth amongst other assets and investments.”
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