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Later Life Mortgage Lending Q3 2024: "significant pickup in equity release enquiries in past few months"

ended 28. November 2024

UK Finance has today published its Q3 later life lending data. Highlights below. Newspage asked equity release specialists for their thoughts, bottom.

  • There were 33,840 new loans advanced to older borrowers in Q3, up 2 per cent year on year. The value of this lending was £5.2bn, which was up 9.7 per cent compared with the same quarter a year previously.
  • There were 5,830 new lifetime mortgages advanced in Q3, down 18.8 per cent year on year. The value of this lending was £510mn, which was down 8.9 per cent compared with the same quarter a year previously.
  • There were 306 retirement interest only mortgages advanced in Q3, up 0.3 per cent year on year. The value of this lending was £28mn, which was up 10.7 per cent per cent compared with the same quarter a year previously.
  • Residential Later Life loans in Q3 represent 7.7 per cent of all residential loans. BTL Later Life loans in Q3 represent 21.7 per cent of all BTL loans.

4 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
There has been a significant pickup in equity release enquiries and applications in the past few months, typically to repay outstanding mortgages and finance, as well as helping children with their own finances. Recent innovations in the product ranges have also opened up more interest, with both shorter and no-ERC products appealing to borrowers. The mortgage rates have been better priced and more appealing compared to traditional mortgage deals, and that has helped with volumes, but the increasing cost of funds may turn off some activity in early 2025.
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Iain Swatton
Managing Partner at Later Life Property
The third quarter figures for later life mortgage lending reveal a tale of two trends: a 2% rise in new loans to older borrowers reflects steady demand, yet the 18.8% drop in lifetime mortgages highlights the stark impact of the current rate environment. With borrowing capacity squeezed by higher rates, it’s no surprise that consumers are being more cautious. This tale of growing demand but constrained potential underscores the need for innovation, as lenders introduce creative solutions to meet the needs of an ageing population. If rates ease, we could see this demand turn into a surge, transforming the later life lending landscape.
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Ken James
Director at Contractor Mortgage Services
The later life lending market is growing. Considering you only need to be 55 to to take out an equity release loan, you hardly have to be old to utilise this form of finance. There are many parents and grandparents tapping into the equity from their homes to help the younger members of their families. Many older clients are equity rich but cash poor, relying on small pensions and allowances afforded to them. In some cases they are being supported by the generosity of friends and family, and yet they may have hundreds of thousands of untapped equity in their homes. When you consider these hardships, is it any wonder that later life lending becomes a strong option for them. For some it’s to redo the home or to ensure they can pay the heating, for others it’s a lifetime dream holiday. The reasons for taking the money out is varied but one thing is certain: we are seeing an increased demand in this area.
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Simon Bridgland
Director at Charwin Private Clients
Considered by some as the dirty secret of consumer finance, demand for later life lending definitely picked up in the third quarter. Cost of living pressures and interest-only mortgages coming to an end are resulting in more interest from consumers who need to release equity tied up in their homes. These figures also indicate to me that the scrutiny advisers have been under to give consumers a wider unsiloed selection of solutions rather than a one-size-fits-all approach focused on only lifetime mortgages has worked. Seeing the residential figures rise by 11.32% for house purchase, remortgage and RIO and a meagre 2.12% for BTL purchase and remortgage, whereas Lifetime mortgages reduced by 18.8% year on year, in my opinion shows clear evidence that other options are being considered. This is evidence that advisers are doing the right thing. Siloed advice only works if there is a robust hand-off process.