Market share gains in both residential and BTL segments
Mortgage lending to older borrowers has accelerated significantly in the third quarter, according to new figures released by UK Finance.
A total of 39,950 mortgages were extended to this demographic during the period, representing an 18.4% year-on-year increase. The aggregate lending volume reached £6.5 billion, a 24.7% rise from the preceding year's equivalent quarter.
Within this broader category, lifetime mortgages maintained a steady expansion, with 6,040 advances recorded in Q3. This equates to a 3.4% increase compared with the same quarter in 2024, while the corresponding lending value of £530 million reflected a 3.9% annual rise.
Retirement interest only mortgages, a smaller but growing segment, saw 335 new loans advanced during the period. The number of such mortgages rose by 11.7% on a year-on-year basis, with their combined value of £30 million indicating an 11.1% increase.
As a proportion of the wider mortgage market, later life lending continued to gain ground. Products classified as later life mortgages now account for 7.84% of all residential lending, while their representation within the buy-to-let sector reached 21.74%.
Commenting on the latest later life lending numbers, Simon Webb (pictured right), managing director of capital markets and finance at later life lender LiveMore, highlighter the fiscal headwinds facing older homeowners and the implications for pension-earning retirees.
"In light of the Chancellor's Budget announcement yesterday, we can expect to see later life lending continue on this upward trajectory," he said. "The highly anticipated 'mansion tax' will hit older homeowners considerably, leaving those who are asset-rich but cash-poor with significant outgoings. Plus, a continued freeze on income tax thresholds, will result in an ever-greater number of pensioners paying income tax on their hard-earned pension pots.
"For more and more older people, releasing funds from their home will be the best way to enjoy a stress free, supported retirement without moving. So, it's never been more important for brokers to be aware of the options available to those looking for a later life lending product. While equity release may be the best option for some customers, a RIO mortgage, interest-only product or lifetime mortgage may work better for others."
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