Latest trends in market revealed
New analysis from lifetime mortgage lender Pure Retirement has indicated shifting trends among its customer base in the third quarter of 2024, with a notable decrease in the average age of borrowers and a growing preference for drawdown plans.
According to the lender’s data, under-70s now account for 59% of new initial advance activity, compared to 50% in Q2 2024 and 43% at the same time last year. In contrast, the proportion of customers over 75 has dropped to 15% from 23% in Q2 and 31% a year ago. The average age of new lifetime mortgage customers currently stands at 68.
For the first time, drawdown plans have overtaken lump sum plans as the preferred option among new customers, with 51% opting for drawdown in Q3, up from 46% in Q2 and 41% a year earlier.
The analysis also found that the proportion of single female applicants continues to rise, reaching 70% in Q3. This compares to 67% in Q2 and 64% at the same point in 2023.
Loan usage patterns have remained relatively stable over the past year, with the top five uses of funds largely unchanged. However, the lender noted distinct differences in how drawdown and lump sum customers utilise their funds.
Lump sum customers are more likely to release funds for needs-based reasons, with 31% citing this motivation — double the rate seen among drawdown customers and a 4% increase from last year. Meanwhile, 15% of drawdown customers used funds for holidays, a trend that has remained consistent, while holidays have not featured among the top five uses for lump sum customers in 2024.
“These latest figures continue to underline the importance of effectively using data to fully understand customers, so that in turn we, as a sector, can continue to deliver best outcomes for them,” said Paul Carter (pictured), chief executive of Pure Retirement.
“The increasing levels of activity among younger and single female applicants, as well as the divergent usage patterns among lumpsum and drawdown customers, highlight the diverse audience lifetime mortgages has continue to serve throughout 2024, providing exciting opportunities for the market going forward.”
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