Data from UK Finance showed the value of lending was 0.3% higher than the same period a year earlier.
Within this, there were 5,300 new lifetime mortgages advanced during the period, a fall of 8% year-on-year and 7.2% on the previous quarter. This lending was valued at £490m.
The value of retirement interest-only (RIO) mortgages issued over Q1 was flat at £33m, but the volume of loans rose 5.4% to 353.
Some 11,700 buy-to-let (BTL) loans were advanced to older borrowers, down 2.9% on the previous year, while the value of this business was 4.7% higher at £2.2bn.
Despite a 6.8% decline in numbers, most later life borrowers in Q1 were in the 55-60 age bracket, making up 17,100 people. The second-biggest cohort was borrowers aged between 60 and 65, totalling 9,300, a 4.2% drop on the same quarter last year.
Aldermore Insights with Jon Cooper: Edition 9 – Why lending strategy is becoming more central in buy to let
Sponsored by Aldermore
A similar number of borrowers aged 65-70 and over 70 took out later life mortgages in Q1, with customer bases of 4,700 and 4,660 respectively.
Residential later life loans represented 8.2% of all residential loans in Q1, while BTL later life lending made up 20.1% of the wider BTL market.
The retirement balancing act
Jim Boyd, CEO of the Equity Release Council, said retirement was “increasingly becoming a balancing act between pensions, savings and property wealth”.
He added: “The fall in lifetime mortgage activity mirrors the more cautious mood across the wider mortgage market, with economic uncertainty and pricing pressures continuing to slow decision-making. However, demand clearly has not disappeared.
“The Pensions Commission has recently reported that 15 million people are currently not saving adequately for retirement. As pension pressures continue to build, housing wealth will play a growing role in helping drive financial resilience in later life. Modern later life lending products have transformed significantly in recent years, with greater flexibility and stronger consumer protections helping accelerate confidence across the market.”
