It aims to provide alternative mortgage solutions for borrowers hit by soaring inflation, interest rates and costs of living who it suggests are ‘neglected’ by conventional lending systems.
The expansion is expected to help Scottish customers in the 50 to 90+ age range access LiveMore’s products over the coming year. Through its retirement interest-only (RIO) and term interest-only (TIO) products, LiveMore aims to give Scottish borrowers access to longer-term fixed rates so they can get a mortgage where they might otherwise struggle with a less bespoke approach.
The company said it sees Scotland as a high-opportunity later life market that is currently underserved.
The Financial Conduct Authority’s latest mortgage prisoners review revealed that Scotland is home to 5,500 of the UK’s 47,000 mortgage prisoners. Scotland also has the highest concentration of 50 to 90+ people per capita in the UK at 40 per cent compared to 38 per cent in England and Wales, which is expected to increase to 44 per cent by 2040 versus 42 per cent in England and Wales.
Citizens Advice Scotland reported in December 2021 that the number of Scots seeking advice on mortgage arrears has increased by 38 per cent, which it predicts will go up in 2022 once Covid support stops.
LiveMore’s managing director, Mike O’Brien, told Mortgage Solutions: “More than 10 per cent of UK mortgage prisoners are in Scotland and there’s relatively thin competition there, in spite of that high concentration. We’re seeing that in the volume of enquiries from consumers and brokers asking about whether we’re lending in Scotland, and all of that points to a need from borrowers and an opportunity for us.
“We’re focused on people who have incomes that high street lenders won’t service and have neglected, and what we’re also seeing is a lack of representation. It makes sense to offset that stable income of pensions stream with a stable mortgage so there are no nasty surprises. We’re finding that it’s not until you hit the retirement phase where people find that they’ve had lenders looking to lend to them throughout their life, they hit this phase and they’re seeing fewer options which makes no sense. They’ve got stable income streams, strong credit, demonstrable asset management. They shouldn’t be penalised for the life events they’re likely to see.
“People are looking at rising inflation, rising interest rates and this is causing a real demand for longer fixed rates since the new year, with a particularly high demand for five to 25 years, or fixed for life plans to manage the ongoing volatility by getting fixed rates now.”
LiveMore hopes its more bespoke approach to lending will help Scottish brokers and borrowers reach their financial goals that they can’t through conventional high street systems. Customers will have a range of fixed rates from five to 30 years, a maximum loan to value (LTV) of 75 per cent, and an alternative to downsizing or applying for an equity release mortgage, which many over-50s can feel forced into.
O’Brien added: “We have one of the widest property criteria in the market as we’re happy to look at background assets. We have a very good understanding of how borrowers’ income and assets change as they move on into retirement age so we’ve got a real focus on helping people in later life with things like care fee programs, and product breaks for those experiencing life events (e.g. death of a spouse, or sickness) as we know that the probability is higher and we don’t want to penalise borrowers for that. We want to be there with them for the journey.
“Our vision is that anyone with a strong payment history – we want to provide them with an option instead of channeling them down a route. We’re trying to provide good value solutions relative to other options for borrowers.
“We need to be competitive within each of those segments, but our options compete on criteria as opposed to price – but for those borrowers where we have wide criteria, I’d argue that we are good value.”