"One of the key challenges is how we make later life lending a choice, rather than a product of last resort"
Speaking at The Building Societies Show, panellists said rising first-time buyer ages and longer mortgage terms mean lending into later life is already happening – even if the market has yet to fully acknowledge it.
The panel – consisting of Tom Brett (Equity Release Council), Malcolm Davidson (UK Moneyman), Sanjay Gadhia (Mortgage Advice Bureau) and Paul Saroya (Viva Retirement Solutions) – said many advisers are still not adapting to this shift.
“If you look at the age of the average first-time buyer now, we are already, subconsciously, lending into retirement. This isn’t a future issue: it’s already happening,” said Gadhia.
Davidson added: “With rising property prices and longer mortgage terms, later life lending has effectively become mainstream, whether we like it or not.”
Despite this, later life lending is still often treated as a niche or last-resort option. Brett said the focus should now be on making it a standard part of advice.
“One of the key challenges is how we make later life lending a choice, rather than a product of last resort,” he said, noting that over half of borrowers expect to use property wealth in retirement.
Panellists also highlighted gaps in advice, particularly around vulnerability and consistency of service.
“Advisers need to be able to look at both conventional mortgages and later life lending options. If you can’t do that, you are putting your client at a disadvantage,” said Saroya.
He added that while the later life sector has stronger safeguards around vulnerability, these are not consistently applied across the wider market.
Lenders were also urged to innovate to support a growing group of “underserved” borrowers carrying debt into later life, with Davidson concluding:
“Product like interest-only or hybrid products could be part of the solution, and this is an area where building societies could really come into their own, although there’s still some consumer mistrust due to what happened with endowment mortgages.”
“We also need to think about how we better connect interest-only products with lifetime mortgages. Why is it seen as such a negative for someone to pay interest on their mortgage, if the alternative might be renting?”
“There’s a whole group of great borrowers with lots of equity here who are being ignored or under-served.”
The Building Societies Show, held on 21 April at Coventry Building Society Arena, brought together 37 building societies, brokers and senior decision-makers to focus on improving broker support and customer outcomes.
