54% of financial advisers expect an increase in enquiries about later life lending over the next 12 months, driven by new product developments and improving 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 35% of those anticipating increased demand attribute it to the development of later life lending products tailored to specific customer needs. A further 34% cited growing confidence in the housing market as a key factor.

House price rises were also identified as a driver of demand, with 27% of advisers believing they will lead to more later life lending enquiries. Additionally, 26% pointed to anticipated reductions in the Bank of England base rate as a contributing factor.

The positive outlook follows a year of steady growth, with 59% of advisers reporting an increase in later life lending enquiries over the past 12 months. However, the research also highlights significant untapped demand, reinforcing the view that the later life lending market — estimated to be worth £30 billion — is not yet reaching its full potential.

LATER LIFE LENDING PRODUCTS BECOMING INCREASINGLY RELEVANT

Key’s research found that 87% of advisers believe they have clients who would benefit from later life lending solutions, including 38% who estimate that more than half of their clients could benefit. On average, advisers surveyed believe that 45% of their clients would benefit from these products.

The study also revealed that 93% of advisers receive at least one enquiry per month about later life lending, with nearly half (47%) reporting weekly interest from clients. Despite this, fewer than two in five advisers (36%) said they consider all available options for their clients.

Will Hale, group director at Key, said: “Optimism about the later life lending market remains relatively high with the year ahead looking positive following a reasonable past 12 months.

“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 that 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, of course, translating untapped demand into material market expansion so more customers can benefit from these modern later life lending products that are well-positioned to address the wants and needs of the over 50s. The key barrier is advisers generally focusing on their own area of expertise and not thinking more widely. We must continue to 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.”