Equity release lending falls 9% as uncertainty delays borrowing decisions
The equity release market recorded a slowdown in Q1 2026, as global uncertainty weighed on consumer decision-making and delayed completions.
According to the latest data from the Equity Release Council, total lending fell to £574m in Q1 2026, down 9% on the previous quarter (£632m) and 14% year-on-year (£655m).
Customer numbers also declined, with 12,958 new and returning customers accessing housing wealth, down 7% on the quarter and 10% annually.
The Equity Release Council, the trade body for the UK equity release market compiles the index from actual whole-of-market returns, making it the UK’s definitive equity release data.
Equity release allows older people to access the wealth in their property without needing to sell or move home. Lifetime mortgages make up more than 99% of the market. These mortgages allow customers to borrow against their homes without making repayments unless they choose to. The loan and interest are repaid when the customer dies or moves into long-term care.
chart: total equity release lending, by quarter
Adviser feedback suggests underlying demand is resilient, despite the slowdown in lending. Nearly half (45%) of firms reported an increase in enquiries compared to the previous quarter, while only one third (33%) reported a decrease.
Applications also rose for many firms with 38% reporting an increase over the quarter, compared to 34% who reported a decrease.
While customer enquiries and applications have held up, fewer cases are progressing through to completion in the current environment.
David Burrowes, chair of the Equity Release Council, said: “It’s disappointing to see activity fall in Q1, particularly given the significant uplift in enquiries. However, like other parts of the mortgage market, it’s clear the uncertainty dominating the UK and global economies, driven by the conflict in Iran, is contributing to higher interest rates and borrowing costs – while tighter loan-to-value availability is further slowing consumer decision-making, delaying completions.
“What we’re seeing is not a lack of demand – enquiries are up – but a delay in cases coming through. Advisers are reporting strong levels of interest, but customers are taking more time and, in some cases, pausing decisions altogether.
“It could well be that we are set for an uplift as conditions stabilise and delayed cases begin to complete. Over the longer term, the underlying drivers of demand remain in place, and housing wealth continue to play an important role in supporting financial resilience later in life.”
The Q1 2026 market numbers showed new plan volumes fell 8% over the quarter to 4,868, while returning drawdown customers saw a more modest decline of 2% to 7,019. Further advance activity recorded the largest movement, falling 27% over the quarter to 1,071.
Average loan sizes declined across most product types, reflecting a more cautious borrowing environment. New lump sum lending fell 2% over the quarter and 5% year on year to £121,196, while initial drawdown lending declined 8% over the quarter and 10% annually to £62,633.
In contrast, average drawdown reserve facilities increased by 6% on the quarter to £61,307.
Looking forward – broker forecast
Looking ahead, adviser sentiment suggests activity is expected to improve. Over two in five firms (46%) expect enquiries to increase in Q2 2026, while 50% expect applications to rise, indicating a strengthening pipeline in parts of the market as current uncertainty may begin to ease. In contrast, only one in five firms (20%) expect enquiries to fall in Q2 with the same number expecting applications to fall.
The Equity Release Council is the representative trade body for the equity release sector. Since 1991, more than 680,000 homeowners have accessed £50bn of property wealth via Council members to support their finances.
Jim Boyd, chief executive officer of the Equity Release Council, said: “Broker forecasts point to a strengthening pipeline, with adviser feedback suggesting demand is being deferred, rather than disappearing. As uncertainty starts to ease, we expect more of this activity to feed through, supporting a recovery in the months ahead.
“Releasing equity will inevitably become a mainstream part of retirement planning as advice and products become less siloed and retirement finance inadequacy worsens. Almost four in ten (38%) of future retirees are on track to fall below the Pensions UK ‘minimum standard’. With demographic and economic pressures building, demand is likely to grow, supported by product changes that make the secure but flexible financing options provided by modern equity release products increasingly attractive for consumers.”