UK Finance’s later life mortgage lending update for Q2 2024 reveals that there were 5,610 new lifetime mortgages advanced in Q2, down 16.9% year on year.
The value of this lending was £470m, which was down 6% compared with the same quarter a year previously.
The data also shows there were 326 retirement interest only mortgages advanced in Q2, up 23% year on year. The value of this lending was £30m, which was up 15.4% compared with the same quarter a year previously.
Residential Later Life loans in Q2 represent 7.5% of all residential loans. BTL Later Life loans in Q2 represent 22.2% of all BTL loans.
Commenting on the latest figures Livemore managing director of capital markets and finance Simon Webb pointed to the downward trend that started in the latter half of 2023.
“This is concerning for both older borrowers and the housing market as a whole. This decline suggests that many older homeowners are facing increasing challenges in accessing the finance they need to support their later years.
“This decline is particularly worrying considering our ageing population, with over 20 million people currently over 55. Interest-only products can be a lifeline for these individuals, but it is clear from these figures that many are unaware of their eligibility and options. This not only limits their financial flexibility but could also exacerbate issues like pension shortfalls or the ability to cover unexpected expenses.”
He concluded: “For lenders, this is a crucial moment to reassess how we can innovate and adapt to meet the evolving needs of an aging population, ensuring they are not left in a financially vulnerable position.”
Phoebus chief sales and marketing officer Richard Pike saw some signs of positivity “While today’s figures for Q2 2024 initially look a bit disappointing, with new loans down by 8.34% year on year and new lifetime mortgages down 16.9% year on year, they are in fact an improvement on last quarter’s figures.
“Last quarter there were only 28,840 new loans advanced to older borrowers compared to 32,990 this quarter. Similarly for new lifetime mortgages, those figures are up from 5,060 last quarter to 5,610 in Q2.”
He added: “We’re seeing strong foundations for continuing growth in later life lending, which will be further helped with lower interest rates and better deals. I think we’ll see more and more innovation in this sector as lenders work hard to gain market share.”
