The number of new equity release customers jumped by 12% to 5,240 in Q2 as the market recovered from a downturn last year, according to the Equity Release Council’s latest quarterly market report.

Total lending rose by 15% to £578m in the latest quarter amid adviser evidence that some clients are using the products, which release home equity, to boost income and cope with pension shortfalls.

Despite the increases, the number of new equity release clients was down 22% year on year and the amount of lending was down 13% year on year.

The Equity Release Council said the double-digit rise in the number of customers taking out new products made Q2 2024 the busiest quarter for almost a year for the equity release market in terms of total customers served and total lending activity.

A 3% annual increase to 8,051 in returning drawdown customers during Q2 made this the most resilient part of the market when comparing activity year-on-year, the council said.

The average lump sum released was £110,969, up 7% on the previous quarter and 18% year on year.

Increases in average loan sizes on both a quarterly and annual basis were a sign of returning customer confidence, according to the council, which said new drawdown customers were making larger initial withdrawals and reducing the amount held in reserve.

Source: Equity Release Council

* = the relatively small number further advances taken out (Q2 2024 – 1033) means that data on this specific metric is more volatile.

Source: Equity Release Council

* = the relatively small number further advances taken out (Q2 2024 – 1033) means that data on this specific metric is more volatile.

David Burrowes, chair of the Equity Release Council, said: “Following a period of economic uncertainty, we are starting to see consumer confidence gradually return to the market with increasing numbers of new customers choosing to use their housing equity to support their needs in later life.

“The pick-up in activity between the first and second quarters is a welcome reversal of the downward trend seen one year ago. There is a long way to go to unlock the market’s full potential, but there are reassuring signs in these figures that we are turning the corner and acclimatising to this unfamiliar interest-rate environment after years of rock-bottom rates."

The Council’s data uses aggregated figures collected from all UK equity release providers, encompassing business from advice firms in the market. The Equity Release Council is the trade body for the UK equity release market.