There has been a significant shift in how UK homeowners are using equity release, according to new analysis.
A study of more than 1,000 Key Group customer cases agreed between Q2 2024 and Q1 2025 (data to 31 March 2025) shows that the proportion of new plans taken out primarily to repay an existing mortgage surged from 36% to 63% over the period. The findings suggest homeowners are increasingly relying on housing wealth to support and stabilise their finances.
Mortgage repayment firmly became the dominant driver of equity release activity, rising from 36% to 63% year-on-year. Meanwhile, discretionary uses fell sharply: home improvements dropped from 14% to 5%, property purchases from 7.9% to under 2%, and vehicle purchases from 7.7% to 3.9%. Gifting fluctuated throughout the year (5.6% → 12.4% → 9.1%), allocations towards other debts climbed (2.7% → 9.1%), and spending on holidays also increased (3.2% → 7.6%).
London homeowners released an average of £145,471 per plan in 2025 — more than double the regional UK average and the highest in the country. The figure is up by more than £27,000 on the previous year, highlighting how the capital’s property market continues to generate the largest withdrawals.
Most customers used equity release to meet more than one financial need. Around a third (31.6%) dedicated the funds to a single purpose, usually mortgage repayment or debt consolidation. A further 32.7% split their release across two priorities, 21.6% across three, and 9.5% allocated funds across four or more uses.
According to the latest Key Group data, the average customer is 69 years old, predominantly female and leveraging equity release as a mainstream option in later-life financial planning:
Average customer age: 69.
Application type: 59% joint, 41% single.
Single applicants: women 592, men 423.
Average property value: £319,809; initial LTV ≈ 19%.
Plan type by case count: 1,540 drawdown vs 946 lump sum.
Despite drawdown being more common by count, the average drawdown facility size has fallen, indicating larger initial draws and smaller contingency facilities.
Rachel East, senior director of Later Life Advice at Key Equity Release, said: “Homeowners appear to be taking a pragmatic, two-part approach: using equity release first to secure essentials and ease immediate financial strain, while still setting aside modest sums for holidays, family gifts and other quality-of-life spending. It’s a shift from optional projects toward careful prioritisation”.
Read the orginal article: https://propertyindustryeye.com/equity-release-surges-as-more-uk-homeowners-use-it-to-pay-off-mortgages/?utm_source=rss&utm_medium=rss&utm_campaign=equity-release-surges-as-more-uk-homeowners-use-it-to-pay-off-mortgages
