The UK equity release market returned to growth in the second quarter of 2026, with lending and customer activity recovering after a weaker start to the year, according to the Equity Release Council.

Total lending increased 4% quarter-on-quarter to £597m from £574m, while the number of customers also rose 4% to 13,489.

The strongest growth came from first-time borrowers, with new customer numbers climbing 9% to 5,307, returning to the same level as a year earlier. Further advances rose 12% to 1,204.

Although average drawdown reserve facilities fell compared with Q1, they remained 7% higher than a year earlier at £56,893, suggesting customers continue to value retaining access to future borrowing rather than taking the maximum amount upfront.

Borrowers continued to take a cautious approach to releasing housing wealth. Average new lump sum borrowing fell 6% to £113,779, while average initial drawdown borrowing increased 2% to £63,642.

Average drawdown reserve facilities stood at £56,893, 7% higher than a year earlier, indicating continued demand for flexible borrowing rather than taking the maximum amount upfront.

Jim Boyd, CEO of the Equity Release Council, said: "It is encouraging to see this increase in activity despite the inherent challenge of continuing domestic and international uncertainty. New customer numbers have recovered to the same level as a year ago, while overall lending and customer activity have both increased over the quarter. The FCA recently described later life lending as a fourth pillar alongside pensions, savings and investments. Today’s figures suggest that transition is already underway."

Equity release allows the over-55s to release money from the property they live in without having to make any monthly repayments, either though lifetime mortgages or home reversion plans.

Broker sentiment also improved, with 37% of firms expecting enquiries and completions to increase during the third quarter, while 35% forecast higher application volumes. Advisers said many customers were delaying decisions rather than abandoning them, with 74% citing hopes of lower borrowing costs and 47% expecting interest rates to be lower than in 2025.

“The adviser survey reinforces what we are seeing in the market. Demand remains resilient. Rather than disappearing, many decisions are being deferred,” Boyd stated.

The wider industry generally welcomed the recovery, but warned the market remains well below previous highs.

Will Hale, CEO of Key Equity Release, said the latest data shows an "encouraging return to growth" for the lifetime mortgage market.

He commented: "The increase in both customer numbers and lending value comparing Q2 to Q1 points to strong underlying demand and a continued appetite for the asset from lenders/funders.

"However, it is important not to ignore the longer-term picture which is less positive. Lending in Q2 was 6% lower than for the same quarter in 2025 and new customer numbers were just 40% of the level seen at the peak of the market in Q3 2022.

"If the later life lending market is to be the ‘fourth pillar’ of retirement funding, as is the stated aspiration of the FCA, then structural issues around customer awareness/understanding and distribution silos need to be urgently addressed."

Simon Webb, managing director of capital markets and finance at LiveMore, added: "There is still work to be done to educate mortgage advisers on these options however, and how mortgage advice can and should fit into advisers’ broader conversations with their clients around wealth and retirement planning."

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