The equity release market recorded a slowdown in Q1, as global uncertainty led to delayed completions and further consumer decision-making, the Equity Release Council has revealed.

Latest data from the council revealed that total lending fell by 9% quarter-on-quarter and 14% year-on-year to £574m.

Customer numbers also declined, with 12,958 new and returning customers accessing housing wealth, down by 7% and 10% quarterly and annually, respectively.

The Equity Release Council said adviser feedback suggests underlying demand is "resilient", despite the slowdown in lending. Almost half (45%) of firms reported an increase in enquiries compared to the previous quarter, while 33% reported a decrease.

Applications also increased for many firms, with 38% reporting an increase, while 34% reported a decrease. The council said that while customer enquiries and applications have held up, fewer cases are progressing through to completion in the current environment.

Chair at the Equity Release Council, David Burrowes, said that it is "disappointing" to see activity fall in Q1, particularly after the increase in enquiries.

He stated: "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."

Looking ahead, the council said that adviser sentiment suggests activity is expected to improve. More than two in five (46%) firms expect enquiries to increase in Q2, while 50% expect applications to rise, indicating a strengthening pipeline in parts of the market as current uncertainty may begin to ease.

Chief executive officer at the Equity Release Council, Jim Boyd, concluded: "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."

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