The UK Finance Later Life Lending Update showed 5,700 new lifetime mortgages lent to borrowers over 55 in Q4, a 6.7% annual increase. The value of this lending was 24.4% up on the same period a year earlier, totalling £510m.
Some 343 RIOs were advanced in Q4 last year, 35.6% higher than the year before. This was at a value of £35m, 34.6% more than the year prior.
There was a 38.4% year-on-year increase in the number of buy-to-let (BTL) loans issued to older borrowers, coming to 11,490. This business was valued at £2bn, a 48.9% rise on the year before.
Some 18,933 residential mortgages were lent to borrowers over the age of 55, a 36% yearly increase, and this was valued at £3.1bn, which was 30.4% higher than the year before.
In total, 35,840 new loans were advanced to older borrowers in Q4 – 28.2% higher annually. This was valued at £5.6bn, 24.4% up on the year before.
The growth of ‘just-off-high-street’ lending
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Residential later life loans accounted for 7.8% of all residential loans in Q4, while BTL loans held by older borrowers represented 21.8% of the wider market.
Higher number of employed older borrowers
UK Finance’s data showed there was a 30.5% annual increase in the number of loans held by employed borrowers, making up 13,920 accounts.
Some 3,060 were self-employed, 25.4% up on the year before, while there was a 29% rise in retired borrowers, totalling 1,290.
Signs of growth in the later life lending market
Simon Webb, managing director of capital markets and finance at LiveMore, said it was “encouraging” to see later life lending was on the rise, as it reflected “growing borrower demand and increased awareness of the role later life lending can play in financial planning”.
He said homeowners wanted more flexible options, adding: “The market must continue to adapt to ensure older borrowers have access to the right products, enabling them to make the most of their financial future.”
Richard Pike, chief sales and marketing officer at Phoebus, said the figures reflected feedback the company was getting from its account servicing clients and was a “clear indication of both increasing borrower demand and the growing importance of this sector within the wider mortgage market”.
He added: “With people living longer and facing more complex financial needs in later life, these products provide a crucial solution for those looking to unlock property wealth. Today’s increase is a positive sign for the broader lending market, demonstrating growing consumer confidence and resilience in the lending market, as providers continue to innovate to meet the needs of older homeowners while ensuring responsible lending remains a priority.”
Jim Boyd, CEO of the Equity Release Council, said the figures echoed its own findings, which reported steady lending growth in Q4.
Boyd added: “This is a testament to the resilience of the market and its ability to adapt to shifting economic conditions.
“While volumes were not as buoyant as some might have hoped in 2024, the work that was undertaken on product development, systems and engagement will [prove] invaluable as we move into 2025. The market has started to turn a corner and there is real cause for optimism as to what can be achieved this year.
“Interest rates have started to fall and even with higher-than-targeted inflation, the recent decision in February should start to build consumer confidence. If the growth seen in 2024 gains momentum, we anticipate that we will see more customers comfortable with considering accessing their housing equity to support a diverse range of different needs.”
Toby Leek, NAEA Propertymark’s president, said the report showed older people still felt confident to borrow money to finance their future home purchases, despite interest rates being relatively high.
“However, with the economic landscape remaining reasonably unsettled, many people’s finances may be stretched, meaning they need to borrow for longer, not out of choice but out of need.
“Much of the country will now be eagerly awaiting interest rates to track downward so that mortgages can continue to become more affordable, allowing others the chance to make their next home moves a reality.”
