Resilience is the word that best captures the mood of the later life lending market right now. Despite another quarter of economic uncertainty, fluctuating sentiment and a still-evolving regulatory environment, the sector continues to prove its strength and maturity.
The latest figures from the Equity Release Council (ERC) paint a clear picture of a market that is both stable and responsible; one that is laying solid foundations for the growth that lies ahead.
In the third quarter of 2025, total lending rose to £639m, up from £636m in Q2 and 4% higher than the same period last year.
That growth was delivered despite a 9% drop in plan numbers, with 13,1580 customers choosing to release equity during the quarter.
On the surface, that might appear like a mixed message but in truth it reflects a maturing, advice-led market where clients are releasing larger sums for specific and well-considered purposes.
Average loan sizes rose across almost every category: from drawdown activity to further advances accessed by customers.
For example, the average initial drawdown rose by 27% from the previous quarter to £83,906, while the average drawdown reserve climbed by 33% to over £71,000.
The Council’s own survey of advisers adds further context. Around three-quarters of advisers report that some customers are deferring decisions while they wait for greater rate stability, but those proceeding are doing so with clear financial intent, typically to clear existing mortgages, reduce debt or improve longer-term flexibility.
What I believe we are therefore seeing is a market in transition; one with positive forward intent led by any number of factors.
Homeowners appear to be acting with confidence in long-term property values and with greater understanding of how later life lending can help them manage their financial goals. This is why average lending is rising even as plan numbers dip, and why advisers should see this as a signal for ongoing growth.
That preparation has perhaps never been more important. The FCA’s DP25/2 recognised the growing demand for later life lending and called for consistent standards, access and advice across all later life lending mortgage solutions.
It reflected a reality advisers already face: that a growing number of older borrowers may not fit into traditional mainstream mortgage boxes. Many will transition through standard, retirement interest-only and lifetime mortgages as their circumstances change and the market needs to ensure advisers are equipped to guide those clients and they must have full access to all products available to older homeowners.
That feels even more important in light of the current – and future – political and fiscal backdrop which is likely to reshape how people think about property wealth even further.
The forthcoming Budget is widely viewed as a potential turning point. Speculation around replacing Stamp Duty with a seller-based property tax, or introducing a mansion tax on higher-value homes, would have profound implications for older homeowners – especially those who are asset-rich but cash-poor.
In that sense, later life lending could move from being a potential option to a necessity, offering a practical route to access the wealth in their homes without having to sell them.
Against that backdrop, advisers need to be proactive. They must ensure they are conducting robust affordability assessments, because only by doing so can clients access the full range of later life lending products.
Advisers should also have a clear plan for later life lending within their advice process, whether that means advising directly or partnering with a specialist.
Taken together, the Council’s Q3 data, the FCA’s Discussion Paper and the potential fiscal reforms ahead all point to the same conclusion: the role of property wealth in financial planning is set to expand. Recognising this now and investing in later life propositions will see advisers and firms well-placed to help clients manage change with confidence.
These most recent Council results are, in many ways, a reflection of a sector that has grown up. It is steadier, more responsible and more aligned with the principles of good advice than ever before.
The clients who are releasing equity are doing so purposefully, with clear goals and strong safeguards in place. For advisers, the opportunity lies in meeting this demand – not just today, but in the years ahead as the value locked in housing becomes an ever more essential part of Britain’s older homeowner story.
Dave Harris is CEO of later life lender more2life
