British homeowners are increasingly using equity release to strengthen their household finances, with mortgage repayments now the main reason for embarking on new plans, according to new initial analysis from Key Group.
The analysis, based on more than 1,000 Key Group client cases agreed between Q2 2024 and Q1 2025 (data up to March 31, 2025), highlights a key shift in the way homeowners use their property assets later in life. Over the period, the proportion of new plans designed primarily to repay an existing mortgage increased from 36% in the second quarter of 2024 to 63% in the first quarter of 2025, indicating a greater focus on reducing monthly financial pressure and improving stability.
In parallel with this change in purpose, the average first issue rose by 13.3% to £62,930, increasing for the first time in three years. Taken together, the numbers suggest that customers are not only prioritizing key financial goals, but are also taking larger upfront amounts when deciding to release equity.
A move away from optional spending
Key Group describes the trend as “the great re-prioritization,” and the supporting data shows a clear reordering of spending intentions. While mortgage repayments became the predominant purpose between Q2 2024 and Q1 2025 (increasing from 36% to 63%), discretionary uses fell sharply.
During the same period:
- Home improvement fell from 14% to 5%
- Real estate purchases fell from 7.9% to less than 2%
- Vehicle purchases fell from 7.7% to 3.9%
These categories are traditionally associated with the use of real estate assets for improvements, large lifestyle purchases or expansion into additional assets. The fact that they are falling while mortgage repayments are rising strongly suggests that homeowners are increasingly using the funds released for immediate financial obligations rather than optional projects.
However, the data also shows that spending on quality of life and family support continues to be part of the picture, albeit in a more reserved and subordinate role. The gift portion fluctuated throughout the year, increasing from 5.6% to 12.4% to 9.1%. Allocations for other debt increased from 2.7% to 9.1%, while allocations for holidays increased from 3.2% to 7.6%.
From an economic perspective, this pattern is important because it reflects how household decision-making adapts: real estate assets are used first to reduce financial burden, with discretionary goals only funded when possible.
The total number of share releases in London remains well ahead
Regional figures illustrate how uneven the ability to release 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 by far the highest in the UK.
This average represents an increase of more than £27,000 compared to last year and highlights that the London property market continues to support larger withdrawals than other parts of the country. For customers who use equity release primarily to repay mortgages, the scale of equity release means that property assets can play a particularly important role in transforming household finances.
Most customers use equity release for more than one purpose
The analysis also suggests that equity release is used less as a single-purpose transaction and more as a planning tool to support multiple objectives. Two-thirds of customers split their publishing across more than one purpose.
The allocation behavior is broken down as follows:
- 6% used their plan for a single purpose (typically paying off a mortgage or debt).
- 7% divided the funds between two purposes
- 6% will be distributed across three purposes
- 5% distributed resources across four or more priorities
This multifaceted approach reinforces the idea that homeowners make structured decisions: using a single plan to reduce financial burden while reserving smaller amounts for other needs.
Customer Profile: Later life planning is becoming more and more mainstream
Key Group data provides further detail about who is completing plans and how equity release is positioned in later life financial planning.
According to analysis:
- Average customer age: 69
- Type of application: 59% together, 41% individually
- Individual applicants: women 592, men 423
- Average property value: £319,809; initial LTV approx. 19%
The initial LTV of around 19% suggests that customers are generally releasing a relatively modest portion of their property value rather than maximizing borrowing. In the context of increasing mortgage repayment as the primary purpose, the data suggests a use case more focused on relief and stability rather than risky borrowing.
Plan Types: Utilization remains common, but patterns are changing
The data also illustrates how customers structure their plans:
- Plan type by number of cases: 1,540 claims versus 946 lump sums
Although withdrawal plans are becoming more common, Key Group notes that the average size of withdrawal facilities has decreased, indicating larger initial withdrawals and smaller emergency facilities. In practice, this means a greater focus on the immediate use of funds to meet current priorities, rather than on setting aside large reserve assets for future use.
What the change signals for the overall economy
For a national business readership, the key story here is not only that equity release volumes or amounts are changing, but also that the rationale for accessing real estate assets is increasingly focused on financial security.
The increase in mortgage repayment as a primary purpose (from 36% to 63%) suggests that a growing proportion of late-life homeowners are using home equity to reduce ongoing obligations and alleviate immediate stress. At the same time, sharp declines in home improvement (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.
However, the data also suggests that homeowners are not taking an “all or nothing” approach. The increase in holidays from 3.2% to 7.6% and the gift share fluctuates from 5.6% to 12.4% to 9.1%. This shows that many are still reserving resources for family support and lifestyle, even when key financial priorities are at the forefront.
The fact that two-thirds of customers split their release across multiple purposes further supports the view that equity release is used as part of broader planning. This appears to be consistent with a more cautious and prioritized approach to household finances.
