Later life mortgage lending experienced significant growth in Q4 2024, with 35,840 new loans for older borrowers, marking a 28.2% increase from the previous year, data from UK Finance revealed.
UK Finance found the total value of this lending was £5.6bn during Q4, up 38.6% compared with the same quarter last year.
There were 5,700 new lifetime mortgages advanced in Q4, up 6.7% year on year.
The value of this lending was £510m, up 24.4% compared with the same quarter in 2023.
In addition, there were 343 retirement interest-only mortgages advanced in Q4, up 35.6%.
The value of this lending was £35m, which was up 34.6% compared with the same quarter last year.
Residential later life loans in Q4 represented 7.8% of all residential loans, while buy-to-let (BTL) later life loans accounted for 21.8% of all BTL loans.
Reaction:
Simon Webb, managing director of capital markets and finance at LiveMore:
“It’s encouraging to see later life lending on the rise, reflecting both growing borrower demand and increased awareness of the role later life lending can play in financial planning.
“As a lender dedicated to serving the over-50s, we’re also seeing strong growth, with more homeowners looking for flexible mortgage options that align with longer working lives and evolving retirement needs.
“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.
“At LiveMore, we take our responsibility to this group seriously – the LiveMore Mortgage Matcher® helps brokers identify suitable solutions for borrowers in a multitude of different circumstances, enabling brokers to provide financial stability and peace of mind for borrowers.”
Richard Pike, chief sales and marketing officer at Phoebus:
“The rise in later life lending announced by UK Finance this morning reflects the feedback we’re getting from our account servicing clients and is a clear indication of both increasing borrower demand and the growing importance of this sector within the wider mortgage market.
“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:
“We are delighted that the UK Finance figures echoes our own in that we have seen steady growth in lending figures with Q4 performing significantly better than the same time last year.
“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 provide 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 president:
“Even with interest rates at relatively high levels, this report demonstrates that older people still feel confident enough to borrow money to finance their future home purchases.
“This trend is being reflected across all buyers, with the Bank of England’s Money and Credit Report for December 2024 finding that net mortgage approvals increased to 66,500 in December.
“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.”
