Figures from the Equity Release Council reflect a subdued start to the year, as year-on-year lending fell by 14% and customer numbers declined.
Just under 13,000 new and returning customers accessed their housing wealth in the three months to March, down 7% on the quarter and 10% annually.
Despite the slowdown in lending, 45% of advisers noted an increase in enquiries compared to the previous quarter, while one-third reported a decrease.
Applications also rose for some firms, with 38% reporting an increase over the quarter, compared to 34% who reported a decrease.
However, while customer enquiries and applications have held up, fewer cases are progressing through to completion in the current environment.
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David Burrowes, chair of the Equity Release Council, said: “It’s disappointing to see activity fall in Q1, particularly given the significant uplift in enquiries. However, like other parts of the mortgage market, it’s clear the uncertainty dominating the UK and global economies, driven by the conflict in Iran, is contributing to higher interest rates and borrowing costs – while tighter loan-to-value availability is further slowing consumer decision-making, delaying completions.”
New plan volumes fell 8% over the quarter to 4,868, while returning drawdown customers fell 2% to 7,019. Further advance activity declined by 27% over the quarter to 1,071.
Average loan sizes declined across most product types. New lump sum lending fell 2% over the quarter and 5% year-on-year to £121,196, while initial drawdown lending declined 8% over the quarter and 10% annually to £62,633.
Average drawdown reserve facilities increased by 6% on the quarter to £61,307.
Looking forward
Looking ahead, adviser sentiment suggests activity is expected to improve. Over two in five firms expect enquiries to increase in Q2 2026, while 50% expect applications to rise, indicating a strengthening pipeline in parts of the market as current uncertainty may begin to ease. In contrast, only one in five firms (20%) expect enquiries to fall in Q2, with the same number expecting applications to fall.
Mark Gregory, founder and chief executive of the Equity Release Group, said: “What we’re seeing is a shift in consumer behaviour. Customers are still engaging with equity release – in fact, we’ve experienced double digit growth in last quarter – but they are often taking smaller initial amounts and prioritising flexibility, suggesting that people are looking to retain control in an uncertain economic environment.
“The market for later life planning is diverse, with consumers now having to prioritise immediate expenses as opposed to longer-term goals, therefore usage is shifting.”
Analysis of market trends by provider Pure Retirement found that over the last three years, the proportion of lifetime mortgage customers aged under 70 rose from 36% in 2023 to 55% last year.
