Pure Retirement has published its analysis of its Q3 loan usage data for new lifetime mortgage customers when taking out an initial advances.

The lender’s figures show very mixed usage patterns between aspirational uses for released equity, and those more rooted in necessity.

Among new customers, the most popular uses of lifetime mortgages remain a balance between the aspirational and the necessary. Both general (i.e. non-structural) home improvements and the repaying of debts and mortgages accounted for around 22% apiece of reasons for borrowing during Q3 – this represents no change in position among the top five most popular reasons for either, with home improvements just edging the top spot. Percentages as a proportion of loan applications have also largely remained stable both year-on-year and quarter-on-quarter, though home improvements saw a 2% drop compared to Q2.

Gifting has grown in popularity, having risen to the third most popular loan usage reason among applicants, compared to being fourth both during Q3 2022 and Q2 2023. It gained 1% year-on-year to sit at 9% of new business volume, and remains unchanged from Q2. While mortgage rates in the residential market have started to drop, they continue to remain relatively high, and as such will likely have contributed heavily to the continued popularity of gifting among families, especially among those who are seeking to help children or grandchildren enter the property market, the lender said.

Additional aspirational reasons bring up the lower end of the top five most popular reason for initial advances, with cars and holidays steadfastly remaining a constant despite the more changeable wider landscape. While holidays have dropped to fourth (from the third place it held in Q3 2022 and Q2 of this year), their percentage has continued to hold steady at 9% throughout the past twelve months. The 8% of people using new initial advances during Q3 for car purchases, meanwhile, represent a 1% increase year-on-year but a 1% reduction from the 9% seen in Q2 of this year.

John Wilson (pictured), Pure Retirement’s chief commercial officer, said: “The diverse usage figures underlines the development shown across the sector in recent years that have helped ensure that lifetime mortgages offer an effective solution suitable for a variety of needs and have helped to create a resilient market.

“Additionally, the figures also validate our own product development strategy to create a range of lifetime mortgages to suit differing customer circumstances, and we look forward to continue to do so for the rest of the year and into 2024.”