Equity release lending falls 9% in early 2026 as borrowers grow cautious

Equity release lending has dropped in early 2026, with figures showing a 9% fall from the previous quarter. The total value of loans reached £574 million, down from earlier levels. Industry experts suggest this slowdown reflects caution rather than a long-term decline. The first three months of 2026 saw a noticeable dip in equity release activity. Total lending fell to £574 million, a 9% decrease from the last quarter of 2025. Compared to the same period last year, volumes were down 14%, with 12,958 customers taking out loans.

New plan numbers dropped 8% to 4,868, while returning drawdown customers fell slightly by 2% to 7,019. Further advances saw a sharper decline, plunging 27% to just 1,071 cases. Despite this, drawdown reserve facilities grew by 6%, reaching £61,307. Loan sizes also shrank, with new lump sum borrowing averaging £121,196—a 2% reduction. Initial drawdown lending fell 8% to £62,633. Lifetime mortgages remained the dominant product, making up over 99% of all equity release lending. Firms reported mixed trends in customer behaviour. Nearly half saw an increase in enquiries, while 38% experienced a rise in applications. However, many borrowers are taking longer to decide, resulting in fewer completed cases. Looking ahead, 46% of firms expect enquiries to grow in the second quarter, and half anticipate more applications.

The decline in lending suggests a temporary slowdown rather than a broader retreat. Firms remain optimistic about future demand, with many predicting a rebound in enquiries and applications. For now, borrowers appear more cautious, weighing their financial choices carefully before committing.