Speaking on the podcast, Darren Deacon (pictured), head of intermediary sales at Family Building Society, said that later life lending was a “key area of lending” for the business, and while market activity was more subdued last year, it was more optimistic about the year ahead.
“We are hopefully moving into a new era where interest rates are a bit more stable. There’s more confidence returning to the market. We had cost-of-living pressures throughout last year and, obviously, high interest rates and rates increasing month-on-month.
“[However] the market has plenty of opportunity. Yes, there are challenges, but there are always elements to it that we can move along with. The market itself is a growing market, the demographic of people in that age group is growing,” he said.
Edward Payne, director of Clifton Mortgages, said that there was a “broader range of products being recommended now”, which was partially due to “necessity”, but “customer need is driving a lot of enquiries”.
“Sometimes it’s down to people needing to deal with issues arising from coming to the end of an interest-only mortgage, sometimes clients I see are trying to do tax planning, inheritance planning or care planning and a lot of the time clients I see are trying to raise money for lifestyle purposes,” he said.
Payne agreed with Deacon that the later life lending market was growing due to an ageing population, and they would have different financial needs and would need “different products”.
He noted that there was a “continental drift” between the later life lending sector and the standard mortgage sector, with retirement interest-only (RIO) and hybrid products coming through to fill the gap.
“All of it’s got to be good for clients, and it’s absolutely necessary because, you know, these clients do still need support,” he said.
Michael Craig, managing director at Brilliant Solutions, added that as a packager it was seeing that complex needs for clients were “much more complex”.
He said, as an example, it was seeing more parents now starting to fund deposits for their son, daughter, granddaughter or grandson, so they would use their own money to lower the loan to value (LTV) needed from 95% to 85% or 80%.
“What we’re seeing is two transactions; we’re looking at the specialist mortgage for son and daughter, but we’re then looking at the RIO-type mortgage, to bring that money out from mum and dad’s property,” he noted.
Watch the 14:21 video talking about the later life lending sector with Family Building Society. Hosted by Mortgage Solutions‘ deputy editor Anna Sagar, with speakers including Darren Deacon, head of intermediary sales at Family Building Society, Edward Payne, director of Clifton Mortgages, and Michael Craig, managing director at Brilliant Solutions.
This is part one of two videos, with a further two videos coming covering regulation and outlook.
