Lifetime mortgages account for more than 99% of the market. Under these products, borrowers are not required to make repayments unless they choose to, with the loan and accumulated interest repaid upon death or entry into long-term care.
Total equity release lending, by quarter
Source: Equity Release Council
“It is encouraging to see this increase in activity despite the inherent challenge of continuing domestic and international uncertainty,” said Jim Boyd (pictured right), chief executive of the Equity Release Council. “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.
“The FCA recently described later life lending as a fourth pillar alongside pensions, savings and investments. Today’s figures suggest that transition is already underway. 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.”
Average borrowing figures pointed to continued caution among new customers. Average new lump sum borrowing fell 6% over the quarter to £113,779, while average initial drawdown borrowing edged up 2% to £63,642.
Average drawdown reserve facilities declined from Q1 but remained 7% higher than a year earlier at £56,893, suggesting borrowers continue to prefer retaining access to future funds rather than drawing the maximum amount upfront.