Equity release lending is growing, but the products remain underused – Harris

That is positive. It shows demand is there and that confidence is improving.

But dig a little deeper and I think we all have to recognise within the sector that a mixed picture appears. New customer numbers grew by less than 1% year-on-year. That tells us most of the growth came from higher loan sizes, not necessarily from more people accessing these products for the first time.

The Q4 2025 data supports this view. Lending reached £632m in the quarter, up slightly on Q4 2024, while average loan sizes rose again. More customers also returned for further advances. That points to existing users seeing value and flexibility in modern lifetime mortgages.

It does not yet point to a broader take-up across the over-55 population.

Sponsored

Renters’ Rights Act: what landlords may be getting wrong

Sponsored by BM Solutions

Still a small part of a much bigger market

This matters because equity release and lifetime mortgages still make up less than 10% of a later life lending market worth around £25bn per year. That feels out of step with reality.

We know more people are borrowing into later life. We know pension income is under pressure. We know housing wealth is often the largest asset many over-55s hold. Against that backdrop, it is hard to argue that lifetime mortgages should remain a small corner of the market.

This is where we need to move these products from the niche space they occupy to a central space in the wider mortgage market. Lifetime mortgages are no longer just a last option. Product design has moved on. Many now allow interest to be paid in full or in part. Early repayment charge (ERC) terms are lower or don’t exist at all. Customers have certainty of tenure, fixed rates for life and a no-negative-equity guarantee.

These features change the role these products can play. They sit alongside retirement interest-onlys (RIOs) and other later life mortgages.

They should be part of the same advice discussion.

Why advice is the key issue

The gap here is not about product supply. It is generally about product/solution access and advice.

Too many over-55 homeowners are entering an advice journey in which lifetime mortgages are not considered at all. That is not because the product is wrong for everyone. It is because advice often stops short of covering all available options.

Many advisers do a good job within their own scope. But if later life lending is outside that scope, strong referral links to specialist operators need to be in place. Without them, customers may never hear about options that could suit them well.

This matters even more as customer needs become more mixed. Some want to manage monthly costs. Others want flexibility. Some want to support family.

Modern lifetime mortgages could help with all of these, but only if they are part of the conversation.

Regulation is moving in the right direction

The Financial Conduct Authority’s (FCA’s) focus on later life lending is a positive step. The recently announced market study reflects how borrowing patterns and customer needs are changing, and how property assets are going to play a central role in a huge number of people’s later lives.

That attention is welcome.

But the industry should not wait. For advisers right now, advice should already mean looking across a range of suitable options for every over-55 customer. That can include, as mentioned above, referring to a trusted specialist if you are not authorised or qualified to offer lifetime mortgages. Doing this now puts advisers ahead of the curve and helps deliver better outcomes.

From niche to norm depends on action

The direction of travel is clear. Demand is growing. Product choice is wider. Regulation is engaging with the sector. The missing piece is consistent access through advice.

If the profession steps up, lifetime mortgages will move from niche to normal far more quickly; not because these products suit absolutely everyone, but because everyone deserves to know whether they suit them.