ER market sees two successive quarters of growth for first time in two years: ERC – Mortgage Strategy

New plans agreed and total lending increased for a second successive quarter for the first time in two years, Equity Release Council’s latest figures show.
The quarterly market report found that the number of new plans agreed went up by 2% to 5,370 over the same period, which meant Q3 became the first quarter since the mini-Budget in Autumn 2022 where the equity release market saw two successive quarters of growth.
Meanwhile, homeowners over the age of 55 withdrew £615m of property wealth from their homes between July and September, representing a 6% rise from Q2 this year.
Average loan sizes increased with new lump sum lifetime mortgage customers taking £111,618 while those taking drawdown lifetime mortgages took £69,952 upfront and reserved another £49,747 for future use.
There was an 8% quarterly rise in existing customers taking further advances to extend their loans, which the Equity Release Council suggests was a sign of customers having sufficient equity remaining in their homes.
This was helped by UK house prices having risen year-on-year for six months in a row, since February 2024, according to the latest UK house price index.
Equity Release Council chair David Burrowes says: “Returning growth may have been modest to date, but it’s particularly encouraging to see the trend continue during the transition period sandwiched between the arrival of a new Government in early July and its first Budget statement later this month.”
“Behind these improving numbers are reports from both advisers and providers alike that consumer confidence is steadily returning. That may not translate into an uninterrupted upwards trajectory from here, but we know there are many households who have decided that releasing equity is right for them and are now focused on ensuring the timing is also right.”
“Housing wealth continues to play a multi-purpose role in people’s financial plans, with mortgage refinancing, gifting and home improvements all common motivations for customers at the moment, alongside topping up retirement income.”
“New customers who need to press ahead have the use of flexible repayment options to manage their borrowing, while people with less pressing needs are watching and waiting to see the future path of interest rates.”
Legal & General Retail Retirement managing director Lorna Shah adds: “The latest data points to a stronger later life market with growth over two successive quarters for the first time in two years.”
“The motivation to draw on property wealth is driven by a variety of factors and is constantly evolving. Legal & General data over the last year revealed a decrease in the number of customers using their property wealth to cover living costs and emergency funds, with a growing trend of people using their property wealth to pay off mortgages or other forms of debt, for instance.”