The later life lending market is showing promising momentum as we move through 2025, with the latest figures from the Equity Release Council (ERC) highlighting a steady recovery and positive growth in the sector.
The data shows more than 15,000 customers in Q4 2024 engaged with the lifetime mortgage market – the first time this figure has been breached in over a year – marking a notable resurgence in activity.
In total, lending increased for the third consecutive quarter, reaching £622m – up 16% from £525m in Q3 2024.
This upward trend in sales growth is great news for the later life lending market, which has seen sales plateau in recent years due to increased economic uncertainty.
However, with interest rates slowly falling and consumer confidence starting to return, the next 12 months look to be more promising for the sector.
One of the key drivers for growth has been the evolution of the market and the introduction of more innovative and diverse later life lending solutions.
This includes products like Interest Reward lifetime mortgages that focus on improving borrower affordability by allowing the borrower to pay some or all of the interest each month.
One of the many benefits of this type of product is that it enables later life lending borrowers to access a better rate and prevent interest rolling up, either entirely, or at a much slower pace. For some, these innovations have made later life lending a more attractive and sustainable option by providing them with greater financial flexibility.
Other products such as retirement interest only (RIO) mortgages and mainstream mortgages for older borrowers have also gained significant traction over the last few years.
This has also opened up the market to a broader pool of borrowers by appealing to those seeking products that align with income and affordability rather than property income.
As the market continues to evolve, 2025 has the potential to be a great year for the later life lending sector.
With more lenders starting to focus on developing solutions that balance financial security with affordability to appeal to a greater number of borrowers, it is likely more people will start to explore the options available in the market.
This presents an opportunity for advisers to consider whether they are in a position to offer these types of products to their clients.
For those that are not, working out what they need to do to become authorised or establish a referral/introducer agreement should be a priority as the year progresses.
Tapping into the later life lending market opens up increased business potential which can provide an additional source of revenue for advisers.
Given the growing blurring of boundaries between the mainstream and later life lending sectors, it is also best practice in a Consumer Duty world where holistic advice and consumer outcomes are paramount.
Having at least one adviser within the business who is able to advise across all later life lending options, including lifetime mortgages, RIO and mainstream mortgages for older borrowers will ensure the needs of this demographic are met. It will also help to satisfy regulatory requirements.
For some adviser firms and sole traders, this may mean seeking help from a network like ourselves.
A network which prides itself on training, supporting and accrediting in being a specialist in the later life lending market.
Also, being part of a wider network enables advisers to refer the client if they prefer, leaving them free to focus on other aspects of their business.
As the UK population gets older and people continue to work and live for longer than ever before, demand for later life lending products is set to increase.
As such, 2025 and beyond promises to be a big year for the sector.
For advisers working in the later life lending space, or those just starting to grow into the sector, being part of a network that can provide the support, resources and access to products while having access to some of the market’s leading whole of market commission rates, is the key to making the most of the opportunities available.
Victoria Clark is head of lending at The Right Mortgage & Protection Network
