Key facts
- The global equity release market is projected to grow to $52.1 billion annually by 2035.
- The market was valued at $17.7 billion currently.
- North America, specifically the U.S. and U.K., are forecast to become the largest markets by annual volume.
- U.S. annual equity release volumes are projected to increase to 21.3 billion euros by 2035.
- U.K. annual equity release volumes are forecast to reach 21.5 billion euros by 2035.
- Banks are the primary source of financing for equity release products globally.
The global equity release market is projected to expand significantly, reaching $52.1 billion annually by 2035, a substantial increase from its current $17.7 billion valuation. This growth is primarily attributed to aging populations seeking retirement funding solutions and the increasing demand for accessing housing wealth without selling homes.
The report, a collaboration between the European Pensions and Property Asset Release Group (EPPARG) and EY, highlights resilience in the market despite geopolitical challenges and high interest rates. North America, with the U.S. and U.K. leading, is expected to dominate future market volume. The U.S. is forecast to see annual volumes rise to 21.3 billion euros by 2035 from 7.1 billion euros, while the U.K. is projected to reach 21.5 billion euros from 7.7 billion euros.
Reverse mortgages, termed "lifetime mortgages," remain the most prevalent product globally. Home reversion arrangements are gaining traction in markets like Poland and Germany. Lump-sum payments are the most popular product type worldwide, though a combination of lump sums and annuities is common in France and Hong Kong. Eligibility typically requires borrowers to be 55 or older in North America, Australia, Hong Kong, and the U.K., with most European markets setting the minimum age between 60 and 65.
Despite the positive growth outlook, funding remains a significant hurdle in several regions. Banks are the main source of finance, followed by securitization, insurance companies, and debt. While most markets have domestic funding, Italy and Ireland are exceptions. The report calls for greater involvement from institutional investors and suggests securitization as a means to expand funding options and facilitate scaling. Digitalization and AI are also anticipated to play a larger role in areas such as customer due diligence, marketing, property valuation, and risk assessment.
Steve Kyle, EPPARG’s secretary general, emphasized the need for socially aware funders and investors to address funding gaps in Europe and called for consumer-focused industry standards. Ben Grainger of EY noted that cross-border funding relationships are beginning to enhance the capacity of European providers. Steve Irwin of the National Reverse Mortgage Lenders Association pointed to rising living costs and aging populations pressuring traditional retirement systems, underscoring the growing importance of housing wealth for financial security.