The number of equity release customers has fallen by 29% in Q1 of this year compared to 2022’s level, figures published by the Equity Release Council have revealed.

New and returning customers dipped to a total of 16,691 between January and March, down from 23,395 in Q1 last year. The latest figure was also down 19% from 20,597 in Q4 2022.

The Council’s figures also showed that a total lending figure of £699m had made Q1 2023 the quietest by this measure since Q2 2020, which coincided with first COVID lockdown in the UK.

New customers also reduced their loan sizes in Q1 this year, with the average first release from a new drawdown lifetime mortgage down 34% year-on-year to £61,785, the smallest seen in almost six years.

The Council also revealed that February was the quietest month of the first quarter of the year, with the number of new plans picking up in March, as product pricing continued to recover from its peak in November 2022.

Chair of the Equity Release Council, David Burrowes, said that people have had to “adjust to the realities of a higher interest-rate environment” in many aspects of their personal finances.

“These figures show the equity release market has been no exception, although there are early signs, with decreasing rates and returning appetite, that a recovery is underway,” Burrowes commented.

“Suitability and timing are everything when it comes to deciding to release equity. For some, it has made sense to continue with their plans. Other would-be customers have evidently been biding their time to see what interest rates do next.”

He added: “Anyone who unlocks money from their homes can do so safe in the knowledge that recent production innovations can work in their favour by giving them options to keep costs under control.

“Seeking advice from a Council member is essential to weigh up short and long-term considerations so that customers understand all their options and alternatives when making a plan.”

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