UK homeowners are increasingly using equity release to stabilise their finances, and London stands out both for the scale of withdrawals and for how property wealth is being deployed to tackle mortgage debt, according to new first-party analysis from Key Group.
The study, based on more than 1,000 Key Group customer cases agreed between Q2 2024 and Q1 2025 (data to 31 March 2025), shows a marked shift in priorities among later-life borrowers. Over the period, the share of new plans taken primarily to repay an existing mortgage rose from 36% to 63%, pointing to mortgage clearance becoming the dominant motivation for many customers.
That change has particular relevance in the capital, where mortgage balances are often larger and the cost of servicing debt has remained elevated compared with the low-rate environment that shaped borrowing decisions for years. Key Group’s analysis indicates London customers released an average of £145,471 per plan in 2025, the highest level across the UK for its customer base and more than double the UK regional average. The figure is also more than £27,000 higher than the year before, underlining how London’s property market continues to drive the largest equity withdrawals among Key customers.
While London’s average release amount is eye-catching, the national picture suggests the broader market is becoming more needs-led. The average initial amount released rose by 13.3% to £62,930, the first increase in three years, indicating that customers are drawing slightly more upfront amid ongoing pressure on household budgets.
At the same time, discretionary uses of equity release fell sharply across the period. Key Group’s data shows home improvements dropped from 14% to 5%, property purchases fell from 7.9% to below 2%, and vehicle purchases reduced from 7.7% to 3.9%. The pattern suggests customers are deprioritising optional spending in favour of financial certainty.
However, the figures also show many customers are not using equity release purely for one purpose. Gifting fluctuated across the year, rising from 5.6% to 12.4% before easing back to 9.1%, while allocations for other debts increased from 2.7% to 9.1% and holidays rose from 3.2% to 7.6%. The overall picture is of homeowners meeting immediate financial needs first while still reserving smaller sums for family support and quality-of-life spending.
Rachel East, Senior Director of Later Life Advice at Key Group, 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”.
Key Group also highlights how customers are spreading the proceeds across multiple goals. Two-thirds of customers split their release across more than one purpose, reflecting what the firm describes as a more flexible, planning-led use of lifetime mortgages. Around 31.6% used their plan for a single purpose, most often mortgage repayment or debt, while 32.7% divided funds across two purposes, 21.6% across three, and 9.5% across four or more priorities.
Customer profile data in the analysis reinforces equity release’s growing role in later-life financial planning. The average customer is 69, with 59% of applications made jointly and 41% made by single applicants. Among single applicants, women outnumber men (592 women compared with 423 men). The average property value was £319,809, with an initial loan-to-value of around 19%, suggesting many customers are accessing a relatively modest proportion of their home’s value, often to address specific pressures such as mortgage repayment.
In product terms, drawdown plans were more common by case count (1,540 drawdown versus 946 lump sum). Key Group notes that despite drawdown being more common, the average drawdown facility size has fallen, which it says suggests larger initial withdrawals and smaller contingency facilities.
For London homeowners in particular, the findings underscore a clear message: housing wealth is increasingly being used as a tool for financial resilience, with mortgage repayment now the leading driver, and the capital’s higher property values enabling significantly larger releases than elsewhere.
Leave a Comment