The UK equity release market showed steady growth in Q3 2025, with total lending reaching £639m, up from £636m in Q2 and 4% higher than the same period in 2024.
Although the number of plans fell slightly, customers were releasing larger sums on average. The trend reflects advice-led financial planning, with older homeowners drawing on housing equity to manage household budgets, support family members, and plan for future needs amid economic uncertainty.
Feedback from advisers, collected through the Council’s quarterly survey, indicates a cautious but confident customer base. Around three-quarters of advisers reported that some clients have deferred decisions while waiting for rate stability. Those moving ahead are focusing on paying down mortgages or managing debt within longer-term financial strategies.
Overall, the data points to a mature and stable market, with borrowers acting prudently while showing confidence in long-term property values.
| 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% |
Steady annual lending growth suggests homeowners are choosing the option of equity release after careful deliberation.
| AVERAGE LOAN SIZES | ||||||
| Average loan value | Q3 2024 | Q2 2025 | Q3 2025 | Quarterly change | Annual change | |
| New lump sum | £111,618 | £126,422 | £116,507 | -8% | +4% | |
| Initial drawdown | £69,952 | £65,856 | £83,906 | +27% | +20% | |
| Drawdown reserve | £49,747 | £53,338 | £71,044 | +33% | +43% | |
| Returning drawdown | £12,768 | £13,150 | £14,549 | +11% | +14% | |
| Lump-sum further advance | £28,570 | £30,180 | £41,069 | +36% | +44% | |
| DD initial further advance* | £25,759 | £27,303 | £30,331 | +11% | +18% | |
| DD reserve further advance* | £10,030 | £6,545 | £6,273 | -4% | -37% | |
| Product choice among new customers | Drawdown: 49% | Lump sum: 51% | ||||
Average loan sizes increased significantly across both new and existing customers, particularly drawdown and further-advance activity.
Additionally, lump-sum lending edged ahead for the first time since late 2022, while drawdown continues to play a key role in enabling flexible long-term planning.
David Burrowes, chair of the Equity Release Council, commented: “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.”
Equity release first appeared when I was an agent in 1986. Even then, it carried an air of mystery — a fog of reassuring promises and unanswered questions. Four decades later, the brochures are glossier, the language softer, and the regulation stronger — but the product itself remains largely unchanged.
At its core, equity release is a **compound-interest loan for life**. Borrow against your home, make no repayments, and allow the interest to roll up until the property is sold. It sounds simple enough, but the long-term cost is rarely presented in plain English.
Let’s take a straightforward example.
A homeowner with a £350,000 property releases 25% — that’s £87,500 — at 6% interest.
They make no repayments and live another 20 years.
By the end of that period, the loan has grown to around **£280,000 owed**.
Even assuming steady price growth of 5.46% per year, almost a third of the property’s future value will have been absorbed by compound interest alone.
That’s not a moral judgment; it’s arithmetic. Yet this reality seldom features prominently in consumer-facing literature. Instead, the conversation centres on *“tax-free cash,” “no monthly repayments,”* and *“stay in your home for life.”* Those claims are technically correct — but incomplete.
To the industry’s credit, modern equity release now includes **mandatory independent legal advice** and a **No Negative Equity Guarantee**. The sector is far safer than it was in the 1980s. But cost transparency still lags behind. Few consumers see a clear projection of what they will owe over 10, 15, or 20 years, or how rising rates and longer lifespans affect the outcome.
Equity release can serve a legitimate purpose. Used as part of a well-considered financial plan — perhaps to clear an interest-only mortgage shortfall or fund care costs — it can provide flexibility in later life. Used without full understanding, it can quietly erode a family’s security.
If the industry wants lasting public trust, **plain-English disclosure** should be the standard. Show the compounding table first, and the smiling couple in the brochure second.
Used with understanding, equity release is a tool.
Used without it, it’s a trap.
The difference lies in what we choose to tell people upfront.
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I consider it a scam
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