The Equity Release Council has reported that the equity release market has seen growth for the first time in 12 months, with quarterly increases in both new customers (10%) and total lending (8%).

A total of 17,078 new and returning customers used equity release products – primarily lifetime mortgages – between July and September 2023 to unlock wealth from their homes.

The number of active customers this quarter was very slightly up from 17,028 in Q2, although it remained down 33% year-on-year from 25,519 in Q3 2022

Total lending reaches £716m in Q3 loaned to 7,379 new customers and 8,466 returning drawdown customers.

In addition, the average initial drawdown is £63,238 but returning customers have the potential to borrow more in the future at the prevailing rate.

The average lumpsum is £94,806 but both lumpsums and initial drawdowns are down about a third on an annual basis.

However, the market remains suppressed at 2017 levels with new customers down (45%) and total lending down (58%) on an annual basis.

David Burrowes, chair of the Equity Release Council, said: “These figures suggest the process of building back is slowly underway in the equity release market, after a period where higher interest rates have prompted consumers and industry to reach for the ‘reset’ button.

“With customers starting to venture back, the market is at the start of a gradual but fragile road to recovery, with pent-up demand likely to emerge in future years as the interest rate cycle begins to turn again.

“While the clock has been wound back on lending activity and loan sizes, product innovation has increased the flexibility of lifetime mortgages.

“New customers of plans that meet our high consumer standards can use voluntary repayments to keep their costs in check while existing customers are free to take extra instalments of money as they need it, safe in the knowledge their previous borrowing is fully insulated from rate rises.

“Looking ahead, we must be wholly committed as an industry to putting equity release in its proper context as one of a range of later life lending options and putting property wealth in its proper context at the heart of every retirement planning conversation.”