UK equity release lending falls as completions slow

By Aarav Garg

Equity release lending slowed in the first quarter of 2026, with total lending falling 9% quarter on quarter to £574 million, according to the Equity Release Council. Volumes were also down 14% from a year earlier, while total customer numbers dropped to 12,958, suggesting that weaker completion rates weighed on the market even as interest remained visible at earlier stages of the funnel.

The data points to a market where demand has not disappeared, but decision-making has slowed. Nearly half of firms reported higher enquiry volumes, while 38% saw applications increase. That suggests the core issue is timing rather than appetite, with borrowers taking longer to move from enquiry to completion.

Lifetime mortgages continued to dominate activity, accounting for more than 99% of lending. The product remains the main route for older homeowners seeking to access housing wealth without monthly repayments, a structure that continues to appeal as retirement planning pressures build.

Across product categories, new plan volumes fell 8% to 4,868. Returning drawdown customers declined 2% to 7,019, while further advances saw the sharpest drop, down 27% to 1,071. Average loan sizes also eased, indicating a more cautious borrowing environment. New lump sum lending fell 2% to £121,196, and initial drawdown lending dropped 8% to £62,633, although drawdown reserve facilities increased 6% to £61,307.

The slowdown reflects a wider FinTech and mortgage market trend that demand can remain intact even when conversion lags. Higher borrowing costs, tighter loan-to-value availability and broader economic uncertainty are all affecting consumer behaviour. For lenders and advisers, that raises the importance of digital engagement, faster underwriting, and clearer customer journey management to reduce drop-off between application and completion.

Looking ahead, firms expect a modest rebound. Around 46% said they anticipate higher enquiries in the second quarter, while half expect applications to rise. That suggests deferred demand could begin feeding through if conditions stabilise.

For financial services providers, the market remains a reminder that equity release is becoming more data-driven, more digitally supported and increasingly linked to the wider retirement finance challenge.

Richard Pike, sales and marketing director at Phoebus Software, commented, “The fall in equity release lending in Q1 reflects a pause rather than a pullback, as later life borrowers delay major financial decisions in response to continued UK and global economic uncertainty. Enquiry and application levels remain relatively resilient, but fewer cases are progressing to completion as customers take more time to consider their financial options.”