Equity release in 2024 was shaped by caution, changing interest-rate expectations and a gradual recovery in customer activity.
The market did not return to the lending levels seen before borrowing costs increased. However, activity strengthened during the second half of the year. Customers also became more selective about when and how they accessed their housing wealth.
This review examines the UK equity release market during 2024. It focuses on lending volumes, customer behaviour, product structure and the practical considerations affecting later-life homeowners.
What happened to equity release in 2024?
- UK equity release lending totalled £2.3 billion during 2024.
- This was below the £2.6 billion recorded in 2023.
- Quarterly lending rose during each of the final three quarters.
- Q4 lending reached £622 million, 16% higher than Q4 2023.
- More than 15,000 customers used equity release products during Q4.
- Drawdown lifetime mortgages represented 56% of new plans in Q4.
- Customers often released smaller initial amounts and reserved funds for later.
- Product pricing improved during the year, although rates remained an important cost consideration.
- Advice, alternatives, benefits, inheritance and long-term interest remained central to suitability.
These figures show a market moving from contraction towards measured recovery. They do not mean equity release became suitable for every older homeowner.
The 2024 equity release market at a glance
The Equity Release Council reported total annual lending of £2.3 billion in 2024, compared with £2.6 billion during 2023.
The year began quietly. Lending was £504 million during the first quarter. However, activity increased to £578 million in Q2 and continued rising during the remaining quarters.
By Q4, lending had reached £622 million. This was the third consecutive quarterly increase and 16% higher than the final quarter of 2023.
| 2024 market measure | Reported result |
|---|---|
| Total annual lending | £2.3 billion |
| Q1 lending | £504 million |
| Q2 lending | £578 million |
| Q4 lending | £622 million |
| Q4 active customers | 15,073 |
| Q4 new plans | 5,361 |
| Q4 returning drawdowns | 8,301 |
| Q4 further advances | 1,411 |
| Q4 new-plan split | 56% drawdown, 44% lump sum |
The full-year figures indicate that the market remained smaller than in 2023. Yet the quarterly direction changed during the year.
The Equity Release Council’s full-year 2024 market report provides the original industry data used in this review.
Why did the market begin 2024 cautiously?
The opening months of 2024 reflected the financial conditions inherited from the previous year.
Higher interest rates had increased the potential long-term cost of new lifetime mortgages. Some homeowners delayed decisions while waiting to see whether product rates might reduce.
During Q1:
- 14,216 new and returning customers used equity release.
- Total lending reached £504 million.
- New customer numbers were 11% below Q4 2023.
- Drawdown products represented 56% of new customer plans.
- Returning drawdown customers increased by 6%.
The figures suggest two different forms of behaviour.
Some new customers postponed borrowing. Meanwhile, people with existing drawdown facilities continued using funds already available under their plans.
A home may hold considerable value, but its value alone does not determine whether borrowing is sensible. The cost, timing and purpose of borrowing matter equally.
Homeowners considering the underlying product structure can read our guide to how equity release works.
Why did drawdown lifetime mortgages remain prominent?
A drawdown lifetime mortgage normally provides an initial amount and a reserve facility.
The customer can take further amounts from the reserve later, subject to the plan’s terms. Interest is generally charged only on money already withdrawn, rather than the entire reserve.
This distinction became particularly relevant during 2024.
In Q1, new drawdown customers took an average of £59,660 initially. A further average amount of £55,251 remained available in reserve.
By Q4:
- 56% of new plans were drawdown products.
- 44% were lump-sum products.
- The average initial drawdown had increased to £70,926.
- The average reserve facility stood at £56,565.
- Returning drawdown customers withdrew £11,426 on average.
Customers may have selected drawdown because it allowed them to avoid borrowing all their anticipated funds immediately. However, later withdrawals can be subject to the interest rate available when each amount is released.
Our lifetime mortgage guide explains interest roll-up, repayment arrangements and common product features.
Lump sum and drawdown plans served different needs
A lump-sum lifetime mortgage provides the agreed-upon borrowing in a single payment.
This may suit a defined expense, such as:
- Repaying an existing mortgage.
- Completing major property work.
- Providing a financial gift.
- Clearing eligible debts.
- Paying a significant one-off cost.
A drawdown plan may suit someone who expects to need money at different stages. However, flexibility should not be mistaken for simplicity.
Each withdrawal increases the secured debt. Future withdrawals can also carry different interest rates. The total owed may grow over a long retirement.
During Q4 2024, the average new lump-sum loan was £115,243. That was 14% higher than a year earlier.
The increase could reflect higher property values, changing customer needs or renewed confidence. It does not establish an appropriate borrowing amount for an individual homeowner.
The possible release depends on age, property value, existing secured borrowing and provider criteria. Our guide explains how much equity a homeowner may be able to release.
What happened to equity release rates during 2024?
Interest rates were central to customer decisions throughout the year.
The Equity Release Council reported that the average annual percentage rate for new products launched in October 2024 was 6.47%. The comparable figure one year earlier was 7.48%, based on data quoted by the Council.
This suggested improved product pricing during 2024. However, lifetime mortgage interest can remain payable for many years.
Where interest is not paid monthly, it is normally added to the loan. Future interest is then charged on the original borrowing and previously added interest.
For example, a lower product rate can reduce the speed at which the balance grows. It does not remove the effect of compounding.
Rates should therefore be considered alongside:
- The amount released.
- Whether funds are taken immediately.
- Voluntary repayment options.
- Early repayment charges.
- Expected ownership period.
- Future moving plans.
- Inheritance objectives.
- Possible long-term care needs.
Product pricing is important, but suitability cannot be reduced to a single percentage.
The role of UK property values
Average UK house prices increased by 3.3% over the year referenced in the Council’s Q4 report.
Higher property values can increase the equity available to some homeowners. They may also support a larger release within a provider’s loan-to-value limits.
However, property value is only one part of the assessment.
Providers may consider:
- The youngest applicant’s age.
- The property’s location.
- Construction type.
- Current condition.
- Minimum property value.
- Existing mortgages or secured loans.
- Health and lifestyle information.
- The requested product and release method.
An estimated online figure is not a lending decision. The property will normally require a valuation before an offer can be confirmed.
What did people use equity release for in 2024?
There is no single purpose shared by every equity release customer.
Common reasons for considering housing wealth included:
- Repaying an outstanding mortgage.
- Funding home improvements.
- Supplementing retirement income.
- Supporting children or grandchildren.
- Adapting a home for later life.
- Paying for a large planned expense.
- Replacing other borrowing.
The purpose affects the advice.
Using equity release to repair a roof presents a different question from releasing money for regular living costs. A one-off financial gift also requires different consideration from repaying an interest-only mortgage.
Homeowners reviewing future income, housing and family objectives can begin with our guide to planning for retirement.
Equity release was not the only later-life option
A suitable review should compare equity release with realistic alternatives.
Depending on the homeowner’s position, these could include:
- Downsizing.
- Using savings.
- A standard remortgage.
- A retirement interest-only mortgage.
- A term mortgage designed for older borrowers.
- Support from family.
- Local authority grants.
- Delaying the planned expense.
- Reducing the amount required.
A conventional mortgage may sometimes be an option if the applicant meets affordability and term requirements. The Connect Mortgages guide to equity release mortgages and later-life borrowing provides further comparison.
Downsizing also deserves proper consideration. It can release capital without creating a secured lifetime debt, although moving costs and personal circumstances matter. Read our comparison of downsizing and equity release.
Regulation and advice remained central in 2024
Equity release is a regulated financial product.
The Financial Conduct Authority has highlighted the importance of balanced promotions and useful advice. The review found examples of benefits being promoted without adequate explanation of risks.
The regulator also emphasised that advice must reflect each customer’s needs and circumstances.
The FCA’s review of later-life mortgage customer outcomes explains its concerns about unsuitable advice and unbalanced financial promotions.
A proper advice process should consider:
- Why is the money required?
- Whether the amount is proportionate.
- Current and future income.
- Existing debts.
- Means-tested benefits.
- Tax implications.
- Family circumstances.
- Inheritance objectives.
- Health and vulnerability.
- Moving and care plans.
- Available alternatives.
An adviser should not recommend equity release where no suitable equity release transaction is available.
Our guide to choosing an equity release adviser explains what customers should expect from the advice process.
What practical risks remained?
The 2024 market recovery did not change the underlying risks.
Interest can compound
Where no payments are made, interest is added to the loan. The balance can grow substantially over time.
The estate may be reduced
The mortgage and accumulated interest are normally repaid from the property’s sale proceeds. Less value may remain for beneficiaries.
Benefits may be affected
Releasing a lump sum can change savings or capital levels. This may affect entitlement to means-tested benefits.
Early repayment charges may apply
Selling, remortgaging or repaying the plan early could create charges. The method used to calculate them varies between products.
Moving may require approval
Many plans are portable, but the new property must usually meet the provider’s lending criteria.
Existing borrowing must normally be repaid
Any mortgage or secured loan against the property usually needs to be cleared when the equity release plan completes.
Advice and legal costs may apply
Customers should consider advice, legal, valuation, arrangement and completion costs.
The main equity release guide explains these benefits and risks in greater detail.
What did the 2024 figures tell us?
Three conclusions stand out.
First, the market remained below its 2023 level. Annual lending fell from £2.6 billion to £2.3 billion.
Second, activity improved as 2024 progressed. Lending increased during the final three quarters, reaching £622 million in Q4.
Third, customers appeared increasingly deliberate about accessing funds. Drawdown remained the majority choice among new customers, while returning customers continued using existing reserve facilities.
Housing wealth can provide financial choices in later life. Yet having a choice does not establish that it should be used.
The practical question is not simply how much value sits within a property. It is how much should be accessed, when it should be accessed and what may be sacrificed in return.
Speak to a later-life mortgage adviser
The 2024 figures provide useful market context. They cannot determine whether an individual plan is suitable.
Before applying, consider the amount required, the reason for borrowing, alternative funding and the possible long-term effect on your estate.
You can explore broader later-life lending options before deciding which route may deserve further investigation.
Frequently asked questions
Did the equity release market grow in 2024?
Annual lending did not grow. It fell from £2.6 billion in 2023 to £2.3 billion in 2024.
However, quarterly activity improved during the year. Q4 lending was 16% higher than Q4 2023.
How much equity release lending took place in 2024?
Equity Release Council members reported £2.3 billion of lending during 2024.
Were drawdown plans popular in 2024?
Yes. Drawdown lifetime mortgages represented 56% of new plans in Q1 and again in Q4.
Why might someone choose drawdown instead of a lump sum?
Drawdown allows funds to be released in stages. Interest is normally charged only after each amount is withdrawn.
Future withdrawals may carry the rate available at that time.
Did lifetime mortgage rates fall during 2024?
The average APR for products launched in October 2024 was reported as 6.47%, compared with 7.48% one year earlier.
Individual rates depended on the customer, property and product.
Was equity release suitable for everyone in 2024?
No. Suitability depended on personal circumstances, objectives, costs, risks and available alternatives.
Regulated advice was required before proceeding.
Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
A lifetime mortgage is a loan secured against your home. Compound interest may increase the total amount owed.
Think carefully before securing other debts against your home.
