The Great Re-prioritisation: UK Homeowners Turn Property Wealth into a Financial Safety Net

Based on more than 1,000 customer cases agreed between Q2 2024 and Q1 2025 (data to 31 March 2025), the research highlights a marked shift in how later-life borrowers are allocating the money they unlock from their homes. Over this period, the share of new equity release plans taken primarily to repay an existing mortgage rose from 36% in Q2 2024 to 63% in Q1 2025. In other words, paying off the mortgage has become the dominant purpose for tapping into housing wealth.

From “nice-to-have” to “must-do”

Key Group describes this pattern as a “Great Re-prioritisation.” The numbers back that up. While mortgage repayment surged as a primary purpose, more discretionary uses moved sharply in the opposite direction.

Home improvements dropped from 14% of plans to just 5%. Property purchases fell from 7.9% to less than 2%, and vehicle purchases decreased from 7.7% to 3.9%. These are precisely the types of big-ticket, optional expenses that homeowners historically associated with equity release products. The data suggests that those projects are being pushed down the priority list.

At the same time, other financially driven uses have risen. Allocations for other debts increased from 2.7% to 9.1%, while the share of customers using equity release to fund holidays rose from 3.2% to 7.6%. Gifting fluctuated over the year, moving from 5.6% to 12.4% and then to 9.1%.

This isn’t a collapse in non-essential spending; it’s more of a rebalancing. The emerging pattern is one where homeowners focus first on shoring up their financial position, then consider how much room remains for lifestyle or family support.

London: the capital of equity unlocking

The regional picture adds another dimension. For Key Group customers, London stands out clearly as the equity release capital.

In 2025, London homeowners who used equity release with Key Group unlocked an average of £145,471 per plan. That figure is more than double the UK regional average and the highest in the UK by a significant margin. It also represents a jump of more than £27,000 compared with the previous year, underlining how London’s property market continues to fuel the largest equity withdrawals.

This combination of higher property values and larger withdrawals gives older London homeowners greater capacity to tackle sizeable financial commitments, such as outstanding mortgages, while still carving out space for other goals.

Balancing multiple priorities with one decision

One of the more striking aspects of the data is how few customers use equity release for a single purpose. Two-thirds of customers split their release across more than one goal.

Only around a third (31.6%) used their plan for a single purpose, commonly mortgage repayment or debt consolidation. A slightly larger share, 32.7%, divided funds across two purposes. Another 21.6% spread their money across three, while 9.5% allocated funds to four or more priorities.

This “allocation behaviour” suggests that equity release is functioning less as a blunt instrument and more as a flexible planning tool. Customers are allocating portions of their release to different needs: clearing the mortgage, addressing other debts, supporting family, funding holidays, or setting aside for modest improvements. In a financial planning context, that flexibility is significant. One decision at the point of advice can support multiple, carefully ranked objectives.

Who is using equity release?

Key Group’s data also sheds light on the typical customer profile and hints at broader demographic shifts in later-life finance.

The average customer is 69 years old, predominantly female, and using equity release as a mainstream option within their retirement planning. Application types skew towards joint applications, with 59% of cases being joint plans and 41% single.

Within single applicants, women are in the majority: there were 592 single female applicants compared with 423 single male applicants. This reinforces the reality that women often play a central financial role in later life, whether as sole homeowners, surviving partners, or primary decision-makers.

The average property value for customers in the study stood at £319,809, with an initial loan-to-value (LTV) of approximately 19%. That relatively modest LTV underlines that many customers are not aggressively leveraging their property; instead, they are using a portion of their housing wealth to address targeted needs.

Plan structures also reveal interesting dynamics. By case count, drawdown plans (1,540) were more common than lump sum plans (946). However, despite drawdown being more popular numerically, the average drawdown facility size has fallen. This points to a pattern of larger initial withdrawals and smaller contingency facilities. In practical terms, more of the value is being accessed upfront, with less reserved for later.

Equity release as part of a more disciplined financial strategy

Taken together, these trends suggest that equity release is evolving from a “nice extra” into a more disciplined component of retirement finance. The sharp rise in plans used primarily for mortgage repayment, the decline in purely discretionary uses such as home improvements, and the growth in multi-purpose allocations all highlight a more measured, priority-driven mindset among older homeowners.

Rather than treating property wealth as a windfall, many are using it to stabilise their finances: clearing mortgages, tackling other debts, and only then directing remaining funds toward holidays, gifts, and other quality-of-life spending.

Key Group, which has supported customers in releasing more than £5 billion of property wealth and brings together brands such as Key, The Equity Release Experts, more2life and Air Group, positions itself at the centre of this shift. With over two decades of experience in later-life finance, the Group remains focused on expanding access to equity release, raising advice standards, supporting advisers and innovating new retirement lending products.

For policymakers, advisers and financial institutions looking at the evolving landscape of later-life borrowing, this new data set provides a clear signal: older homeowners are taking a more pragmatic, stability-first approach to using their greatest asset. The Great Re-prioritisation is already under way.

More information, statistics and further data can be found at Key Group’s research page:

https://www.keyadvice.co.uk/retirewise/money/the-truth-about-equity-release-2025