The equity release market recorded its strongest annual growth in recent years, with total lending reaching £2.57 billion in 2025.

The equity release market grew 11% in 2025, according to the latest research from the Equity Release Council.

Total annual lending increased from £2.3 billion in 2024 to £2.57 billion last year, based on whole-of-market returns compiled by the Council.

The data, which represents the UK’s definitive equity release figures, shows continued demand for later life lending as homeowners look to access property wealth without selling or moving home.

Lifetime mortgages continue to dominate the sector, accounting for more than 99% of the market.

BEHAVIOURAL CHANGES

Survey data accompanying the market figures suggests changing borrower behaviour. More than a quarter of advisers responding to the Council’s latest poll, 26%, said customers are now using equity release to clear existing mortgage balances.

Meanwhile, 40% reported that borrowing is being used for discretionary or lifestyle purposes, including home improvements at 21%, holidays at 6%, car purchases at 4%, or gifting to family members at 13%.

Jim Boyd, chief executive of the Equity Release Council, said: “Growth of 11% underlines the increasingly important role housing wealth is playing in supporting financial resilience and choice in later life.

“It reflects something far bigger than short-term market movements – equity release is proving vital to meeting people’s social and economic needs.

“Modern products are more flexible and secure than ever and, for many homeowners, accessing housing wealth is now a core part of their retirement planning, helping them enjoy financial freedom and a better quality of life.

“Releasing property wealth now supports around £1 in every £90 spent by retired households.”

Q4 2025 PERFORMANCE

The Council’s latest quarterly figures show that momentum continued into the final quarter of the year. Total lending in Q4 2025 reached £632 million, a 1.6% increase compared with £622 million in Q4 2024.

The average amount released rose to £123,174 during the quarter, representing a 5.7% increase year-on-year. Demand for further advances also remained strong, with 1,468 customers returning to access additional borrowing, up from 1,411 in the same period a year earlier.

LOOKING FORWARD: 2026 AND BEYOND

Adviser sentiment points to continued growth. Four in every five advisers surveyed by the Council, 80%, expect total lending to increase further in 2026 compared with 2025, while only 2% forecast a decline. A similar proportion anticipate an increase in overall customer numbers.

David Burrowes, chair of the Equity Release Council, said: “Increasingly, releasing equity is part of homeowners’ retirement plans. Almost four in every 10 future retirees, 38%, are on track for a retirement income below the Pensions UK ‘minimum standard’. Demographic and economic pressures mean the demand is there and likely to grow.

“Innovations in product design are making modern equity release more flexible and more secure, making it more attractive to consumers. The Council also sees sustained long-term growth being supported by increased collaboration across the later life lending sector and regulatory engagement.

“In Q1 of 2026, the Financial Conduct Authority launches a focused later life lending market study, examining how mortgages and property-based solutions can better support consumers borrowing into retirement.

“This is an important step which reflects the reality that borrowing in later life is becoming more common and that the market must continue to evolve to deliver good consumer outcomes.

“That regulatory focus, combined with collaboration and continued product innovation, gives us confidence in the sector’s long-term direction. We have never had a better opportunity to bridge the retirement later life funding gap.”

Lorna Shah, managing director, retail retirement, L&G, added: “These figures suggest that equity release has become an increasingly mainstream consideration as people seek to draw on the funds tied up in their homes to achieve their retirement goals and individual lifestyles.

“L&G works closely with financial advisers and the broader industry to ensure customers are able to make informed decisions that best meet their retirement income needs.

“This ongoing and collaborative dialogue helps ensure that the later life lending sector remains innovative, responsive and customer-driven.”