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 (ERC), total lending fell to £574 million in Q1 2026, down 9% on the previous quarter (£632m) and 14% year-on-year (£655m).
According to the ERC, 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.
As advisers will know, 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.
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, the ERC believe that 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.”
Commenting on the Equity Release Council’s Q1 2026 later life lending figures, Will Hale, CEO of Key Equity Release said:
“The numbers reported by the Council, based on completions of lifetime mortgages in Q1, are not a surprise given the uncertainty in the market in the run-up to the Budget in November last year and obviously more recently the geo-political environment that has seen rates increase and had a broader impact on customer confidence.
“However, at Key we have been encouraged by the level of customer demand that we have seen so far in 2026. Many of these enquiries been driven by customers feeling the pain of higher living costs and particular by those existing older mortgage borrowers that face eye-watering increases in monthly repayments as they come off cheap 5 year fixed rate details.
“The demand we are seeing reinforces the positive medium to long-term outlook for the later life lending market. Aside from those needing a more flexible way to manage existing debt, with over 60s owning more than £3.84 trillion of unencumbered property equity, the home has to be a major part of retirement planning for the future – helping people to boost income, fund capital purchases and/or to facilitate tax efficient intergenerational wealth transfer strategies.
“Many homeowners aged 55-plus could potentially benefit from modern lifetime mortgages which can play a central role in supporting lifestyle objectives and increasing financial resilience. That is why it is vital that advisers of all types whether they are mainstream mortgage advisers, wealth advisers or generalist IFAs should be offering their customers access to all options whether by widening their scope of advice to include these products or by forming referral partnerships with trusted specialists.
“The FCA’s Later Life Mortgages Market Study recognises the importance of the market and the need for change to meet consumer needs. But it is clear that consumer awareness of later life lending options remains low and that advisers who do not specialise in the sector are still not engaging with the massive potential of later life lending.
“Advice silos and outdated views that still see equity release viewed as a last resort by some advisers are impacting customer access to products such as modern lifetime mortgages and should be regarded as a major risk to the achieving good customer outcomes. The latest lending figures published by the Council should serve as a timely reminder of the work that still needs to be done around evolving to holistic advice and consideration of all options if distributors are to meet their Consumer Duty obligations.”
Also sharing his reaction to the latest ERC quarterly data, Brendan Gilligan, Head of Equity Release Proposition at Royal London, comments:
“A slowdown in activity over the most recent quarter reflects how sensitive the equity release market remains to wider economic conditions. Lower loan‑to‑values, combined with ongoing global uncertainty, have understandably led some customers to take more time before proceeding.
“From an adviser perspective, this environment reinforces the importance of careful structuring and robust suitability assessments. Clients are increasingly weighing equity release alongside alternatives such as downsizing, using other assets, or delaying decisions until market conditions improve.
“Modern equity release products are far more robust than in the past, but they remain complex and highly individual. When considered carefully, with full regard to long‑term implications, family circumstances and future needs, equity release can form an effective part of a broader later‑life planning strategy.”
Mark Gregory, Founder & CEO at Equity Release Group, said:
“The latest figures from the Equity Release Council highlights pressures in the market, with a decline in both lending and customer numbers, however demand is not disappearing, but rather reflects a more cautious and considered customer.
“What we’re seeing is a shift in consumer behaviour. Customers are still engaging with equity release – in fact we’ve experienced double digit growth in last quarter – but they are often taking smaller initial amounts and prioritising flexibility, suggesting that people are looking to retain control in an uncertain economic environment.
“The market for later life planning is diverse, with consumers now having to prioritise immediate expenses as opposed to longer-term goals, therefore usage is shifting.
“At the same time, the reduction in new customers highlights an ongoing challenge around awareness and accessibility. For many, the need is there, but the journey to advice is limited or can feel complex to navigate.
“We’re seeing a market that is becoming less about volume growth and more about the quality of engagement. Firms that are investing in technology, improving access to advice and building more diverse distribution models are continuing to see positive momentum, even in a flatter market.
“We are also seeing how customers are using equity release as part of a broader financial strategy, from managing financial pressures to supporting family members, equity release is now shaping the customers wider financial planning goals.
“Looking ahead, the fundamentals of the market remain strong. As consumer confidence stabilises and innovation continues across advice and product development, there is a clear opportunity for more sustainable growth, driven not just by demand, but by how well the industry responds to it. “
Simon Hayton, Pure Retirement Managing Director, said:
“While it’s naturally disappointing to see reductions in case and lending volumes on both a quarterly and annual basis, it would be naïve to expect anything else given wider geopolitical movements and the subsequent effects on wider financial markets. This is something that has also been seen in the residential mortgage market, highlighting the wide-reaching effects of ongoing uncertainty and associated effects on consumer confidence.
“However, the key takeaway is the increase in consumer enquiries and interest, signifying the extent to which later life lending is becoming a mainstream financial planning tool among over-55s. As an industry, we now need to ensure that products and processes meet consumer needs, helping to ensure that when customers are comfortable in proceeding, they feel that they have the best possible experience as they seek to reach their financial goals.”
Commenting on The Equity Release Council’s Q1 2026 Market Report, Sadna Zaman, Home Finance Proposition Manager at Canada Life says:
“Against a backdrop of geopolitical and macroeconomic uncertainty, it’s natural that customers have taken a more cautious approach to financial decision-making this quarter.
“Property wealth remains a significant and often underutilised part of many individuals’ overall financial position. The later life lending market offers a broad range of flexible solutions designed to meet different needs and circumstances as people approach and move through retirement and we, as an industry, should continue to emphasise the important role property wealth can play as part of a well-rounded, long-term financial plan.”
Dave Harris, CEO of more2life, said: “The war in the Middle East has dented confidence and that’s reflected in Q1 lending. But these are temporary headwinds. The structural demand drivers of this market remain unchanged. A growing number of homeowners will need to release equity to fund retirement shortfalls or clear debts, which is why we believe that this market has the potential to be four or five times larger than it is today.
“The FCA recognises that housing equity will need to form a meaningful part of retirement planning for a growing number of people and is actively exploring how to bring equity release into the mainstream. With people living longer than ever, our view has always been that equity release should move from niche to norm – and with the right regulatory framework in place, we believe it will.”
