The later life mortgage market in the UK has seen substantial declines in the second quarter of 2023, according to the latest data from UK Finance.
The report, published today (29th August), indicates a sharp drop across different types of mortgages targeted at borrowers over 55.
New loans in this category reached a total of 30,400 in Q2, marking a 38.5% decrease from the same period last year. The value of this lending shrank as well, coming in at £4.3bn, down 45.7% compared to Q2 of 2022.
Lifetime mortgages, a significant portion of later life lending, suffered too, with only 7,170 new advances. This figure is down by 43.8% year-on-year. The value of these loans took an even sharper hit, collapsing by 63.8% to £550mn.
The trend of decline was consistent in retirement interest-only mortgages as well, with only 265 new loans advanced during the quarter, a 52.3% fall compared to last year. The value of this type of lending also decreased, down by 55.9% to £26mn.
Despite the downturn, residential lending with terms extending into retirement accounted for 60% of all new loans. Furthermore, residential later life loans made up 7.5% of all residential loans in Q2, while buy-to-let later life loans comprised 23.7% of all buy-to-let loans.
