Advisers seen as key to further market expansion
More than half of financial advisers expect demand for later life lending to rise over the next year, driven by new product offerings and increased confidence in the housing market, according to new research from Key Later Life Finance.
The study, which surveyed wealth advisers, over-50s specialists, and generalist advisers, found that 54% anticipate a rise in enquiries over the next 12 months. Of those expecting growth, 35% cited the development of new products tailored to older borrowers, while 34% pointed to improving sentiment in the property sector.
Additional factors influencing demand include rising house prices, highlighted by 27% of respondents, and potential base rate cuts, noted by 26%. The anticipated increase follows a strong year for later life lending, with 59% of advisers reporting higher enquiry levels in the past 12 months.
Despite this optimism, the research suggests the sector is not reaching its full potential, with significant unmet demand. The later life lending market is currently valued at £30 billion, but industry experts believe it could expand further if more advisers incorporated property wealth into retirement planning.
Key Later Life Finance said advisers must explore a broader range of lending solutions for clients over 50, including lifetime mortgages and other specialist products designed for those carrying debt into retirement.
The study found that 87% of advisers believe they have clients who could benefit from later life lending, with 38% estimating this applies to more than half of their client base. On average, advisers surveyed said 45% of their clients would find these solutions useful.
Client interest is also evident, with 93% of advisers reporting at least one enquiry per month, and nearly half (47%) receiving enquiries on a weekly basis. However, fewer than two in five advisers (36%) said they consider all available later life lending options when advising clients.
“Optimism about the later life lending market remains relatively high, with the year ahead looking positive following a reasonable past 12 months,” said Will Hale (pictured), group director at Key. “However, we remain a long way off the highs of 2022, and although there are signs of a recovery, it continues to be a challenging period for specialist advisers and lenders.
“The real cause for optimism is that advisers are recognising more of their clients would benefit from later life lending solutions, with almost all seeing enquiries at least on a monthly basis. The challenge is translating untapped demand into material market expansion so more customers can benefit from these modern later life lending products.”
Hale added that one of the biggest barriers is advisers focusing solely on their specialisms rather than considering a wider range of solutions.
“We encourage advisers to consider all options and to put trusted referral relationships in place with other specialists in order to achieve better outcomes for customers,” he said.
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