According to the Equity Release Council’s (ERC’s) quarterly report, the growth in lending was driven by larger initial releases, with an average release for new lump sum deals coming to £116,507 in the quarter – a rise of 4% annually.
New initial drawdown average releases stood at £83,906, up 20% year-on-year, while the average release for a new drawdown reserve jumped 43% over the same period to £71,044.
Looking at returning drawdown and lump sum further advance average releases, they rose 36% and 44% respectively to £14,549 and £41,069.
On drawdowns, the average releases for drawdown initial further advances stood at £30,331, up 18%, with drawdown further advance reserves falling 37% year-on-year to £6,273.
The number of total plans for the period came to 13,158, a drop of 8% year-on-year.
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The number of new plans decreased 8% annually to 4,932, while returning drawdown customers declined by 10% year-on-year to 6,999. Further advance customers grew by around 1% year-on-year.
Looking at product preferences, 49% of new plans had a drawdown facility, which is the first time lump sum plans have been the preferred choice for customers since 2022.
Capital in drawdowns has increased significantly with higher initial releases and higher reserves, both up 20% and 43% year-on-year.
| Market activity Q3 2025 | |||||
| Overall activity | Q3 2024 | Q2 2025 | Q3 2025 | Quarterly change | Annual change |
| Total lending | £615m | £636m | £639m | 0% | +4% |
| Total plans | 14,281 | 14,404 | 13,158 | -9% | -8% |
| New plans | 5,370 | 5,319 | 4,932 | -7% | -8% |
| Returning drawdowns | 7,796 | 7,640 | 6,999 | -8% | -10% |
| Further advances | 1,115 | 1,445 | 1,127 | -22% | +1% |
Adviser feedback gathered in the survey shows a “confident yet cautious customer base”.
Customers are deferring decisions, with around three-quarters of advisers saying this is due to “waiting for rate stability”.
Customers going ahead are prioritising clearing mortgages or managing debt, the report said.
David Burrowes, chair of the ERC, said: “This quarter’s performance reflects a resilient, confident and responsible market operating in challenging conditions. While fewer customers released equity, those who did were acting with clear financial purpose and strong support from specialist advice.
“Rising average loan sizes, and continued use of drawdown flexibility, show people are using property wealth carefully to manage costs, support family members and plan ahead.
“Equity release remains an important part of later life financial planning. The sector continues to demonstrate resilience, with robust consumer safeguards and advice standards at its core.”
Rise in equity release lending and average loan amounts shows ‘stronger, more mature market’
Lorna Shah, managing director for retail retirement at Legal & General (L&G), said the figures point to a “stronger, more mature market, reflecting how housing equity is becoming an increasingly important contributor to retirement planning”.
She continued: “They also show that more people are using lifetime mortgages to release larger sums, demonstrating that property wealth is being used to fund significant financial decisions.
“Our own data highlights that customers draw on equity release for a wide range of reasons: from home improvement and supporting loved ones to managing day-to-day finances. We expect more people to unlock the £3.7trn held in housing equity over the coming decades.”
Shah said it was “vital” that advisers help clients explore “all available options to find the one that best suits their circumstances”.
“As a lender, we work closely with advisers and the wider industry to ensure customers make informed choices that meet their needs. While equity release isn’t right for everyone, it’s crucial that conversations about retirement income take a holistic view, considering property wealth alongside other assets,” she noted.
Paul Carter, Pure Retirement’s CEO, agreed that the rise in lending and average loan amounts “underlines consumer confidence in utilising housing wealth to achieve financial goals”.
“However, the reduction in the number of plans being taken out also highlights the ongoing need to support those who are on the fence, by continuing to provide a consumer-focused environment through effective product and service offerings.
“Our own recent research has highlighted the widening demographic profile of our new lifetime mortgage customers, including notable increases in activity on a joint lives basis, and from both younger age brackets and from single males. This serves to underline the underlying potential that remains in the market, and we look forward to working towards ensuring lifetime mortgages continue to offer an effective solution that meets the needs of as many people as possible in 2026,” he said.
Nick Flynn, retirement income director at Canada Life, added that it was “encouraging to see the equity release market continue its path of steady growth, even in the face of ongoing economic pressures”.
He continued: “Recent tax changes and the upcoming Autumn Budget may be prompting individuals to take stock of their financial planning strategies. Our data shows a rising number of customers are using equity release as part of their estate planning – helping to support loved ones through gifting and managing potential future inheritance tax liabilities.
“The flexibility of later life lending makes it a valuable tool for older homeowners planning their finances in retirement. With life expectancy rising, equity release is becoming an increasingly important pillar of later life financial planning, enabling individuals to unlock wealth to enhance their financial security in retirement.”
