The Housing Market Is Subdued in 2026 — But Does That Mean You Should Wait on Equity Release?

What the current market looks like

The latest RICS Residential Market Survey paints a soft picture. Near-term house price expectations have fallen to a net balance of -43% — a sharp drop from -19% in February 2026. New buyer enquiries stand at -34% net balance, and agreed sales at -36%. This is a market where activity has slowed noticeably and price confidence has dipped.

The backdrop is a combination of geopolitical pressures — including the Iran conflict pushing oil prices higher — and persistent inflation risk that has kept the Bank of England cautious about cutting rates. Average fixed-rate mortgages have moved back above 5%, dampening buyer confidence and reducing transaction volumes.

For anyone thinking of selling their home, this is a difficult environment. But equity release is a fundamentally different decision from selling — and that distinction matters enormously.

Why equity release decisions aren't driven by short-term market conditions

When you apply for a lifetime mortgage, the amount you could release is based on your property's current valuation, your age, and in some cases your health. You are not trying to sell your home in a competitive market. You are borrowing against it — and you are staying in it.

This means that short-term market sentiment — whether buyer enquiries are up or down this quarter — has very little bearing on your equity release decision. What matters is the long-term trajectory of your property's value, which remains positive despite near-term softness.

Capital Economics and Savills forecast UK house price growth of 1.5% in 2026, rising to 3% in 2027 and 4% in 2028. Even in a subdued short-term environment, the medium-term outlook for UK property values is constructive. The underlying asset supporting your equity release plan holds its value well.

The equity release market is growing regardless

Despite a challenging rate environment, the equity release market grew 11% in 2025 to £2.57 billion in total lending. That growth reflects increasing mainstream acceptance of later-life lending — and the reality that the needs driving people to equity release do not disappear because the housing market is subdued.

The most common uses for released equity in 2025 included:

• Home improvements (21%) — needs that exist whatever the market is doing
• Intergenerational gifting to children and grandchildren (13%) — often used to help with deposits in exactly this kind of difficult market
• Retirement income supplementation — a need driven by living costs, not house prices
• Holidays and lifestyle (6%) — quality-of-life spending that shouldn't be deferred indefinitely

None of these needs are market-dependent. If your boiler needs replacing, if your child is struggling to get on the housing ladder, or if your pension income is falling short — a softer housing market does not change those realities.

Understanding the rate environment and protections

Typical equity release rates currently sit in the 6–7% range, reflecting elevated gilt yields and swap rates. The Bank of England base rate is expected to settle between 3.25% and 3.50% by mid-2026, which may create some scope for rate improvements later in the year. This is worth monitoring, but it is not a reason to delay indefinitely — especially if your need is current.

All Equity Release Council-approved lifetime mortgages include a no-negative-equity guarantee. This means that regardless of what happens to property prices in the future, you — or your estate — can never owe more than the value of the property when it is eventually sold. Your home is your security, but it is also your protection.

A subdued market today does not remove that protection. It does not increase your risk. And it does not reduce the value of acting if your circumstances make equity release the right choice now.