Strong demand from older borrowers fuels double-digit loan growth
Later life mortgage lending saw significant growth in the fourth quarter of 2024, with 35,840 new loans issued to borrowers aged 55 and over — a 28.2% increase from the previous year, the latest UK Finance data has shown.
The total value of these loans reached £5.6 billion, up 38.6% year on year.
Lifetime mortgage lending also expanded, with 5,700 new loans advanced in Q4, a 6.7% rise from the same period in 2023. The value of these loans increased by 24.4% to £510 million.
Retirement interest-only (RIO) mortgages saw even steeper growth, with 343 new loans issued — a 35.6% jump — while their total value rose 34.6% to £35 million.
Later life residential mortgages accounted for 7.8% of all residential lending in Q4, while later life buy-to-let loans made up 21.8% of the BTL market.
“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,” said Jim Boyd (pictured left), chief executive of the Equity Release Council. “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 prove 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.”
Simon Webb (pictured centre), managing director of capital markets and finance at LiveMore, said it was 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,” Webb added.
“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.”
For Richard Pike (pictured right), chief sales and marketing officer at mortgage servicing provider Phoebus, the rise in later life lending reflects the feedback they have been getting from their account 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,” Pike said. “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.”
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