The latest data from UK Finance shows an increase in later life lending activity by both volume and value in Q3.
There were 39,950 new loans advanced to older borrowers in Q3, up 18.4% year-on-year. The value of this lending was £6.5bn, which was up 24.7% compared with the same quarter a year previously.
There were 6,040 new lifetime mortgages advanced, up 3.4% annually, with a total value of £530mn, up 3.9% compared with Q3 2024.
There were 335 retirement interest-only mortgages advanced in Q3, up 11.7%, with the value of lending up 11.1% to £30mn.
Residential later life loans in Q3 represent 7.84% of all residential loans, while buy-to-let later life loans represent 21.74% of all buy-to-let loans.
Simon Webb, managing director of capital markets and finance at LiveMore, commented: “In light of the Chancellor’s budget announcement yesterday, we can expect to see later life lending continue on this upward trajectory. The highly anticipated ‘mansion tax’ will hit older homeowners considerably, leaving those who are asset-rich but cash-poor with significant outgoings. Plus, a continued freeze on income tax thresholds, will result in an ever-greater number of pensioners paying income tax on their hard-earned pension pots.
“For more and more older people, releasing funds from their home will be the best way to enjoy a stress free, supported retirement without moving. So, it’s never been more important for brokers to be aware of the options available to those looking for a later life lending product. While equity release may be the best option for some customers, a RIO mortgage, interest-only product or lifetime mortgage may work better for others."
Mary-Lou Press, president of NAEA Propertymark, said: “It is positive to see many lenders demonstrating a firm commitment to those who may be aged 55 and over. In previous years, such demographics have typically been underserved with suitable mortgage products that are tailored to their needs.
“However, there is a flip side to highlight, and that is openly talking about why there is increased demand within this specific age bracket. We are seeing ever growing complexities in life, such as cost-of-living concerns and the ability to put aside such sizeable sums of money needed for deposits. The reality is that the pressures many people face in their younger years are contributing more heavily towards not easily achieving a footing on the housing ladder until much later in life.”
