Equity Release Statistics You Need To Know!

Is Equity Release Booming in 2024? Discover the Latest Equity Release Statistics, What the ERC Has Reported, and if Equity Release Is Worth Considering. Check This Out.
  • Last Updated: 29 Jan 2024
  • Fact Checked
  • Our team recently fact checked this article for accuracy. However, things do change, so please do your own research.

Contributors:

Francis Hui

Key Takeaways

  • The latest equity release statistics in the UK reveal a steady increase in the number of people over 65 accessing the wealth tied up in their property.
  • Over the years, they have shown a growing popularity of this financial tool among the older demographic, indicating a shift in retirement funding strategies.
  • As per the current statistics, a surge in lifetime mortgage products and a decrease in home reversion plans maps the trend in the UK market.
  • Across different UK regions, they depict widespread usage, with the South East and North West of England showing the highest rates of releases.
  • They impact older investors by providing insights on market trends and potential risks, aiding in making informed decisions about property wealth management.

What do the latest equity release statistics tell you about these products?

The Equity Release Council1 has released the Q2 2023 statistics, and the results show slight increases in borrowing activity.

Does this mean equity release is back to its record-breaking former self circa 2022?

In This Article, You Will Discover:

    At Every Investor, our team thrives on providing the latest equity release news and information to help you on your journey toward financial security in retirement. 

    Take a look at these vital statistics:

    What Is Equity Release?

    For homeowners aged 55 and above, releasing equity is a financial strategy to access the value of their homes while still living there.

    It's a practical way to turn a portion of your home's equity into usable funds, either as a lump sum or regular income.

    Each type, be it a lifetime mortgage or a home reversion plan, offers unique benefits.

    They can be tailored to specific goals, like funding long-term care, travel, or even assisting with intergenerational wealth transfer.

    What Are the Latest Equity Release Statistics in the UK?

    Equity release in the UK has seen a significant surge recently.

    According to the Equity Release Council's Spring 2021 report, a total of £3.89bn was lent to homeowners aged 55 and over in 2020.

    Additionally, new customers opting for this financial scheme rose by 10% compared to 2019, with 76,154 new plans agreed upon, highlighting the growing popularity of equity release.

    Interestingly, the data unveils specific trends within the equity release market.

    Drawdown lifetime mortgages, the most popular plan type, accounted for 64% of new agreements in 2020.

    In contrast, lump-sum lifetime mortgages and home reversion plans made up 36% and less than 1% respectively.

    These statistics underline consumer preference for flexibility in accessing property wealth, a vital understanding for those navigating the equity release landscape.

    Equity Release Council Statistics: Q2 2023

    Equity Release Council statistics in Q2 of 20232 show a continued drop in product activity as a response to the increased interest rates resulting from the mini-budget.

    However, statistics started to increase towards the end of the quarter.

    It is important to note that increased rates are seen across mortgage products, with the gap narrowing between traditional and lifetime mortgage rates over the past year.

    How Many New Equity Release Plans Were Taken Out Between April and June 2023?

    6,682 new equity release plans were taken out between April and June 2023.

    This figure is similar to the previous month’s 6,766 but down by 1%. 

    Has the Number of New Plans Taken Out Increased or Decreased?

    The number of new plans taken out has decreased this year, likely due to the interest rates increase.

    Year-on-year, there was a 46% drop, with 12,485 new customers choosing equity release in Q2 2022.

    11,174 new plans were agreed to in Q4 2022, with a 17% drop from the previous quarter.3

    Of course, this is a 39% drop when compared to the previous month.

    Has There Been an Increase or Decrease in Total Quarterly Lending?

    There has been a decrease in total quarterly lending of 5%, with the total amount borrowed sitting at £664mln.

    With equity release on the rise until recently, this is the slowest quarter since Q3 2016.

    What Type of Lifetime Mortgage Was Most Popular?

    The type of lifetime mortgage that was the most popular was the drawdown lifetime mortgage, as it increased in popularity over the past year.

    52% of customers chose a drawdown lifetime mortgage, with 48% selecting a lump sum.

    Has the Market Returned to Growth?

    Unfortunately, the market has not returned to growth, but it is still active.

    With the cost of living crisis4 still a reality in the UK, homeowners will still utilise products like equity release to supplement income in later life. 

    Which Month Showed the Best Results?

    The month that showed the best results was June 2023 at 2,462.

    However:

    The Council’s SEO said it is too early to know if this is the start of a rise in product activity.

    How Many Returning Customers Were There in Q2 2023?

    There were 2,529 returning customers in Q2 2023, which is more than the previous quarter.

    There was a 15% growth quarter-on-quarter, with 2,193 customers returning in the first part of the year.

    What Was the Average Released by Returning Drawdown Customers?

    The average released by returning drawdown customers was £12,468, which is 7% less than the previous quarter.

    It is believed that homeowners are withdrawing less equity as they cautiously navigate high-interest rates.5

    What Is the Equity Release Council’s Newest Product Standard?

    The Equity Release Council’s newest equity release product standard is that all new lifetime mortgages must give customers the option to repay monthly interest and a portion of the loan, penalty-free.

    Past Statistics

    Past statistics show that equity release has recently been on a downward trend, but it rose significantly in the past two years. 

    A summary of the past few quarters:

    Q1 2023

    In Q1 of 2023, customer activity rose slightly, which could potentially mean that equity release is again on the rise, but it is too early to tell.

    Q4 2022

    During Q4 of 2022, market activity dipped following September’s mini-budget rate increases.

    Q3 2022

    In Q3 2022, a new record is reached as an 8% increase in new equity release plans taken out by homeowners aged 55+, resulting in over 13,000 new customers for the quarter.6

    Q2 2022

    Just before Q2 of 2022, the Council launches it's fifth product standard on 28th March, allowing customers to make penalty-free partial repayments if they can afford it.7

    Q1 2022

    In Q1 of 2022, equity release showed a rise in popularity thanks to more people considering equity release, with total quarterly lending exceeding £1.5bln.8

    Q4 2021

    During Q4 of 2021, the property wealth sector returned to growth for the first time since 2018 thanks to over 76,000 customers using equity release products.9

    Q3 2021

    In Q3 2021, customers had already accessed nearly £3.5bln in the year, vastly outperforming the previous year.10

    Q2 2021

    During Q2 of 2021, Over 20,000 new and existing customers accessed property wealth in the UK.11

    Q1 2021

    In the first quarter of 2021, £1.4bln in equity was released by new and existing UK-based equity release customers.12

    Q4 2020

    In Q4 of 2020, 11,566 new equity release plans were unlocked and the total cash released in 2020 was £3.89bln.13

    Q3 2020

    In Q3 2020, Equity release activity began to recover towards pre-Covid levels with a 41% increase in new plans agreed.14

    Q2 2020

    With Covid lockdown conditions during Q2 of 2020, there was a steep drop in the equity release market as activity fell by one-third.15

    Q1 2020

    Q1’s 2020 Pre-lockdown activity led to over £1bln of equity release products being accessed.16

    Equity Release Statistic Comparison and Graphs

    Take a look at this equity release statistic comparison graph:

    graph 1 ei 1
    graph 2 ei 1

    Common Questions

    What Are the Latest Equity Release Statistics in the UK?

    How Have Equity Release Statistics Changed Over the Years?

    What Do Equity Release Statistics Say About Market Trends?

    How Do Equity Release Statistics Compare Across Different Regions in the UK?

    What Impact Do Equity Release Statistics Have on Older Investors?

    When Were the Last Equity Release Records Broken?

    How Were These Statistics Compiled?

    How Many UK Homeowners Have Opted for Equity Release in the Past Year?

    What Is the Average Amount of Equity Released by UK Homeowners?

    What Are the Primary Factors Driving the Demand for Equity Release?

    Conclusion

    The latest Equity Release Council statistics for Q2 2023 reveal a complex picture of the equity release market in the UK. 

    Whilst there have been some indications of recovery, the sector has not returned to it's record-breaking performance of 2022. 

    Drawdown lifetime mortgages remain popular, and new standards are emerging to provide more flexibility to customers. 

    However, caution appears to be the prevailing sentiment as homeowners navigate high-interest rates. 

    The market is undoubtedly one to watch, and these equity release statistics will continue to provide valuable insights into consumer trends and the overall economic landscape in the UK.

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