That’s according to the Equity Release Council (ERC), which said that 4,698 new customers took out an equity release plan in the first three months of this year.
That was down by 11% compared to the last quarter of 2023, and a significant 31% lower than in Q1 2023.
Total lending was £504m in the first quarter of the year, down 6% from £535m in Q4 2023.
The council noted that “with rumours of an interest rate cut ahead of summer, potential new customers are adopting a wait-and-see attitude”.
Drawdown remains popular
In total, 14,216 new and returning customers made use of equity release products between January and March, up 4% from Q4 2023 (13,651).
Returning customers drove a 6% quarterly increase in drawdown activity as confidence held firm among those with existing plans.
Of the 14,216 customers who were active in the equity release market between January and March 2024, 55% were drawdown customers taking withdrawals from existing plans. One in three active customers took out new plans (33%), while the remaining 12% agreed further advances (extensions) on existing plans.
David Burrowes, chair of the ERC, said: “The Q1 2024 data highlights the ongoing challenges facing the residential property market in the UK as the nation waits to see what happens next with interest rates and the health of the economy.
“In our market, consumer confidence is holding up well among people with existing plans, who are not shy of making use of drawdown facilities or exploring further advances. New customer numbers are lower than last year, with feedback from the market suggesting that older homeowners are adopting a more cautious approach to borrowing as there are hopes of interest rate reductions in the near future.
“As we look to the rest of 2024, we are confident that the green shoots that we are starting to see will germinate and the market will return to growth.”
