UK Finance has reported that that there were 5,830 new lifetime mortgages advanced in the third quarter of 2024, down 18.8% year on year.
The value of this lending was £510m, which was down 8.9% compared with the same quarter a year previously.
There were 306 Retirement Interest Only (RIO) mortgages advanced in Q3, up 0.3% on the same period in 2023. The value of this lending was £28m, 10.7% higher than Q3 2023.
Meanwhile, Q3 saw 33,840 new loans advanced to older borrowers in Q3, up 2%. The value of this lending was £5.2bn, up 9.7% year on year.
Residential later life loans in the third quarter represents 7.7% of all residential loans, while later life buy-to-let loans in Q3 represented 21.7% of all buy-to-let loans.
INSIGHT
UK Finance publishes a quarterly insight into mortgage lending to borrowers over age 55, looking at the trends in lending and demographics of borrowers accessing the market.
“I’d expect now that the market and consumers have a feel for the future, lending levels will pick up more in 2025”
Richard Pike, chief sales and marketing officer at Phoebus, said: “Today’s figures should be taken positively. Each quarter this year, we’ve seen rises in the number of new loans advanced to older borrowers. It’s grown from 28,840 in Q1 to 33,480 in Q3. The value of lending is up from £4.3bn in Q1 to £5.2bn Q3.
“While the number (5,830) of new lifetime mortgages sold in Q3 are down 18.8% year on year, there were still more mortgages advanced than in Q2 and Q1 (5,610 and 5,060 respectively).
“We continue to see increasing positivity towards later life lending products in the UK. Undoubtedly the election and the first budget of a new Labour government has delayed some decision making, but I’d expect now that the market and consumers have a feel for the future, lending levels will pick up more in 2025.”
“The market should feel extremely encouraged by these figures”
Adrian Brewer, head of later life at Access Financial Services, added: “The market should feel extremely encouraged by these figures, especially bearing in mind the series of reasons that borrowers have had to delay financial decision-making.
“The election, the Budget, the Bank of England’s decisions around interest rates and so on have all factored into making 2024 a challenging year for the mortgage market, and yet UK Finance figures have shown consistent quarterly increases in later life mortgage lending this year, which is great news for our sector.
“I expect that when the dust has settled on the oscillations of 2024, we’ll see a significant further pick-up in lending in 2025.”
Simon Webb, managing director of capital markets and finance at LiveMore, added: “The Q3 2024 later life mortgage lending figures paint an increasingly positive picture for older borrowers, with sustained growth quarter-on-quarter in residential loans.
“The £5.2bn advanced this quarter marks a 9.7% year-on-year increase, reflecting a growing recognition of the financial needs and aspirations of borrowers aged 50 and over. When compared to Q2’s £5bn and Q1’s £4.3bn, the consistent uplift in lending volume is a testament to the sector’s resilience and evolution.
PRISONERS
“The recent All Party Parliamentary Group (APPG) report on the Financial Conduct Authority’s treatment of mortgage prisoners further underscores the need for tailored solutions in the market. Thousands of over-50s remain stuck on high-cost loans, often due to traditional affordability criteria that don’t account for their financial realities.
“This is a deeply concerning issue, with far-reaching effects on borrowers’ financial, physical, and emotional well-being. At LiveMore, we take our responsibility to this group seriously. Many of our customers previously believed they had no options, but we’ve helped them access fairer, more sustainable products.
“The LiveMore Mortgage Matcher helps brokers identify suitable solutions for borrowers at term-end or those feeling trapped on high rates. By addressing these challenges head-on, we aim to provide a pathway to financial stability and peace of mind for borrowers, enabling them to achieve their life goals.”
