Later life lending slows as borrowers remain cautious

Later life mortgage lending slowed during the first quarter of 2026 as older borrowers continued navigating higher borrowing costs and affordability pressures, latest UK Finance figures show.

There were 36,050 new loans advanced to borrowers aged over 55 during Q1, down 4.8% compared to the same period last year.

However, despite lower volumes, the total value of lending edged up by 0.3% year-on-year to £6bn, suggesting borrowers are continuing to take larger loans amid higher property values and refinancing costs.

UK Finance said residential later life loans accounted for 8.2% of all residential lending during the quarter, while later life buy-to-let lending represented 20.1% of all buy-to-let loans.

WEAKENED LIFETIME ACTIVITY

Lifetime mortgage activity also weakened during the quarter. There were 5,300 new lifetime mortgages advanced during Q1, down 8% annually and 7.2% lower than the previous quarter.

The total value of lifetime mortgage lending reached £490m.

The slowdown comes as advisers and lenders continue adjusting to changing customer behaviour across the equity release and retirement lending markets, with many borrowers remaining cautious around long-term borrowing decisions.

However, Retirement Interest Only lending continued to show modest growth.

UK Finance reported 353 new RIO mortgages advanced during Q1, up 5.4% year-on-year, with lending volumes holding steady at £33m.

BALANCING ACT

Jim Boyd (main picture), CEO of the Equity Release Council, said: “Retirement is increasingly becoming a balancing act between pensions, savings and property wealth, and today’s figures reflect that shift.

“The fall in lifetime mortgage activity mirrors the more cautious mood across the wider mortgage market, with economic uncertainty and pricing pressures continuing to slow decision making. However, demand clearly has not disappeared.

“The Pensions Commission has recently reported that 15 million people are currently not saving adequately for retirement.

“As pension pressures continue to build, housing wealth will play a growing role in helping drive financial resilience in later life.

“Modern later life lending products have transformed significantly in recent years, with greater flexibility and stronger consumer protections helping accelerate confidence across the market.”