UK homeowners are increasingly using equity release to strengthen household finances, with mortgage repayment now the leading reason for taking out new plans, according to new first-party analysis from Key Group.
The analysis, based on more than 1,000 Key Group customer cases agreed between Q2 2024 and Q1 2025 (data to 31 March 2025), points to a decisive change in how later-life homeowners are using property wealth. Over the period, the share of new plans taken primarily to repay an existing mortgage rose from 36% in Q2 2024 to 63% in Q1 2025, indicating a stronger focus on reducing monthly financial pressure and improving stability.
Alongside this shift in purpose, the average initial release increased by 13.3% to £62,930, rising for the first time in three years. Taken together, the figures suggest that customers are not only prioritising essential financial goals, but are also taking larger upfront amounts when they choose to unlock equity.
A move away from optional spending
Key Group describes the trend as “The Great Re-prioritisation”, and the supporting data shows a clear reordering of spending intent. While mortgage repayment became the dominant purpose between Q2 2024 and Q1 2025 (36% rising to 63%), discretionary uses fell sharply.
Over the same period:
- Home improvements declined from 14% to 5%
- Property purchases dropped from 7.9% to less than 2%
- Vehicle purchases fell from 7.7% to 3.9%
These categories have traditionally been associated with using housing wealth for upgrades, big lifestyle purchases, or expansion into additional assets. The fact they are declining while mortgage repayment rises strongly indicates that homeowners are increasingly directing released funds toward immediate financial commitments rather than optional projects.
However, the data also shows that quality-of-life spending and family support remain part of the picture, albeit in a more restrained and secondary role. Gifting fluctuated across the year, moving from 5.6% to 12.4% to 9.1%. Allocations for other debts increased from 2.7% to 9.1%, while holidays rose from 3.2% to 7.6%.
In national business terms, this pattern matters because it reflects how household decision-making is adapting: property wealth is being used first to reduce financial strain, with discretionary goals funded only where possible.
London’s equity release totals remain far ahead
Regional figures underline how uneven the capacity to unlock large sums can be. Among Key Group customers, London homeowners released an average of £145,471 per plan in 2025, more than double the UK regional average and the highest in the UK by far.
That average marks a jump of more than £27,000 compared with the year before, highlighting how London’s property market continues to support larger withdrawals than other parts of the country. For customers using equity release primarily to repay mortgages, the scale of releases in the capital means that property wealth can play a particularly significant role in reshaping household finances.
Most customers use equity release for more than one purpose
The analysis also suggests that equity release is being used less as a single-purpose transaction and more as a planning tool that supports multiple goals. Two-thirds of customers split their release across more than one purpose.
The breakdown of allocation behaviour is as follows:
- 6% used their plan for a single purpose (commonly mortgage repayment or debt)
- 7% divided funds across two purposes
- 6% allocated across three purposes
- 5% allocated funds to four or more priorities
This multi-purpose approach reinforces the idea that homeowners are making structured choices: using a single plan to reduce financial strain while also reserving smaller amounts for other needs.
Customer profile: later-life planning becomes more mainstream
Key Group’s data provides further detail on who is taking out plans and how equity release is being positioned in later-life financial planning.
According to the analysis:
- Average customer age: 69
- Application type: 59% joint, 41% single
- Single applicants: women 592, men 423
- Average property value: £319,809; initial LTV approximately 19%
The initial loan-to-value of approximately 19% suggests customers are generally releasing a relatively modest proportion of their property value, rather than maximising borrowing. In the context of mortgage repayment rising as the primary purpose, the data points to a use case focused on relief and stability rather than high-risk borrowing.
Plan types: drawdown remains common, but patterns are changing
The data also highlights how customers are structuring plans:
- Plan type by case count: 1,540 drawdown vs 946 lump sum
While drawdown plans are more common by count, Key Group notes that the average drawdown facility size has fallen, indicating larger initial withdrawals and smaller contingency facilities. In practical terms, that suggests a stronger emphasis on using funds immediately to meet current priorities, with a reduced focus on holding large reserve facilities for future use.
What the shift signals for the wider economy
For a national business readership, the key story here is not just that equity release volumes or amounts are changing, but that the reason for accessing property wealth is becoming more focused on financial security.
The rise in mortgage repayment as the primary purpose (from 36% to 63%) indicates that a growing share of later-life homeowners are using housing equity to reduce ongoing obligations and ease immediate strain. At the same time, sharp declines in home improvements (14% to 5%), property purchases (7.9% to less than 2%), and vehicle purchases (7.7% to 3.9%) indicate a clear move away from optional spending.
Yet the data also suggests homeowners are not adopting an “all-or-nothing” approach. Holidays rising from 3.2% to 7.6% and gifting fluctuating from 5.6% to 12.4% to 9.1% shows that many are still reserving funds for family support and lifestyle, even as essential financial priorities dominate.
The fact that two-thirds of customers split their release across multiple purposes further supports the view that equity release is being used as part of broader planning. This appears consistent with a more cautious, prioritised approach to household finances.
Read more:
UK Homeowners Shift Equity Release Towards Mortgage Repayment as Financial Security Takes Priority
