The equity release market returned to growth during the second quarter following a slower start to the year, but remained below 2025 levels, new data has shown.
The latest figures from the Equity Release Council showed total lending increased to £597 million during the second quarter of this year, up 4% on the previous quarter. Overall customer numbers also rose 4% to 13,489.
The Council said the strongest growth came from new customers, with 5,307 homeowners accessing housing wealth for the first time, a 9% jump on the first quarter and returning to the same level seen in the second quarter of 2025.
Existing customers also remained active during the second quarter. Further advance customer numbers increased 12% to 1,204, while returning drawdown customer numbers remained stable at 6,978.
Jim Boyd, chief executive officer of the Equity Release Council, said: “It is encouraging to see this increase in activity despite the inherent challenge of continuing domestic and international uncertainty. New customer numbers have recovered to the same level as a year ago, while overall lending and customer activity have both increased over the quarter.
“As retirement funding becomes increasingly dependent on a mix of assets, housing wealth is becoming a more mainstream part of financial planning, supported by stronger consumer protections, greater product flexibility and high-quality advice.”
However, lending in the second quarter was 6% lower than for the same quarter in 2025 and new customer levels were just 40% of the level seen at the peak of the market in the third quarter of 2022.
Meanwhile, average borrowing patterns continued to reflect a cautious approach to accessing housing wealth. Average new lump sum borrowing fell 6% over the quarter to £113,779, while average initial drawdown borrowing increased 2% to £63,642.
Will Hale, CEO of Key Equity Release, said: “The increase in both customer numbers and lending value comparing Q2 to Q1 points to strong underlying demand and a continued appetite for the asset from lenders/funders. However, it is important not to ignore the longer-term picture which is less positive.
“The lifetime mortgage market continues to be operating at a fraction of its potential given the obvious growing customer and societal need coupled with the innovation seen in the product landscape. If the later life lending market is to be the ‘fourth pillar’ of retirement funding, as is the stated aspiration of the FCA, then structural issues around customer awareness/understanding and distribution silos need to be urgently addressed.”
The Equity Release Council said adviser sentiment remains “cautiously optimistic” about the future. More than a third (37%) of firms expect enquiries to increase during the third quarter, while a similar proportion expect applications (35%) and completions (37%) to rise. Almost half (47%) of firms expect application levels to remain broadly unchanged.
David Burrowes, chair of the Equity Release Council, said: “There are no two ways about it: today’s market is very different from that of a decade ago. Customers increasingly want flexibility, choice and the ability to tailor borrowing around changing circumstances, which continues to drive demand for drawdown products.
“As confidence continues to improve, the market is well placed to support more people looking to incorporate housing wealth into their retirement planning. The priority remains ensuring consumers have access to high-quality advice and strong protections so they can make informed decisions that reflect their individual circumstances.”
However, Hale said mainstream mortgage advisers, wealth managers and advisers need to adopt a “broader perspective” and ensure that the home is front and centre of financial planning decisions and that all product options are considered when making a recommendation.
“Limitations around scope of advice must not be a barrier to customers accessing the most suitable solutions for their circumstances and more robust referral mechanisms into trusted specialists is one route to ensuring consistently good outcomes.
“The prospects for the later life lending market are bright but today’s numbers should be a wake-up call for trade bodies, regulators and sector participants to move quickly from considered analysis and positive words to more decisive action,” he added.
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