UK house prices may have cooled from their peak, but affordability pressures remain acute.

Even with recent adjustments to interest rates, rising property values have left many borrowers stretching further to achieve their homeownership goals. Policymakers have responded by easing affordability rules, including raising Loan-to-Income (LTI) caps.

Analysis from Stonebridge in July showed that average loan sizes are already up by £11,500 as a result.⁽¹⁾

The trade-off is that larger loans typically mean longer terms. More borrowers are repaying mortgages into later life, and more landlords are leveraging property wealth later in their careers. For brokers, this convergence of demographic change and regulatory reform is creating one of the most important growth markets in the industry.

LATER LIFE LENDING GOES MAINSTREAM

Later life lending is no longer a niche. According to UK Finance, 33,130 new loans were advanced to borrowers over 55 in Q2 2025, worth £5.2 billion — up 3% year-on-year.⁽²⁾ The range of options has expanded, from retirement interest-only (RIO) and lifetime mortgages to standard repayment deals extending well beyond state pension age.

The shift is driven by borrower demographics. The average first-time buyer is now in their mid-30s, and nearly 70% of new borrowers opt for 30-year terms or longer, with almost half extending beyond 35 years.⁽³⁾ Today’s first-time buyers are tomorrow’s later life lending customers and many are already on track to repay into retirement.

REGULATORY TAILWINDS

This expansion has not gone unnoticed by regulators. In June, the FCA launched its DP25/2 consultation,⁽⁴⁾ acknowledging the need for more flexibility and product fit for older borrowers. It is considering ways to ease access to RIOs and lifetime mortgages while encouraging holistic advice that looks at the full range of later life options.

The risk profile is reassuring. Borrowers aged 66 and over currently record some of the lowest arrears rates, supported by smaller balances and stable retirement or investment income. With strong demographic demand and low credit risk, innovation in later life lending is expected to accelerate.

The same trends are reshaping buy-to-let. More landlords are refinancing or expanding their portfolios later in life, often to release equity for lifestyle needs, succession planning, or intergenerational transfers. Many landlords are now structured through limited companies, but individuals borrowing in later life still represent a significant share of the market.

For these clients, flexible later life criteria are crucial. Options such as no maximum age on repayment terms, acceptance of rental, pension or investment income, and interest-only borrowing up to age 86 with sale or downsizing as a repayment plan, all make a material difference. Joint Borrower/Sole Proprietor models can also open doors, enabling family members to help structure borrowing in a sustainable way.

With more than £1 trillion of UK rental property wealth held by over-55s, ⁽⁵⁾ buy-to-let and later life lending are increasingly overlapping. This creates fertile ground for brokers to advise on both sides of the equation.

OPPORTUNITIES FOR BROKERS

For brokers, the opportunity is twofold. First, revisit your existing client bank to identify customers who could benefit from longer terms, higher LTI limits or more flexible criteria.

Some clients coming to the end of their current deal may now have more borrowing capacity, even in a higher rate environment. Others may be looking for refinancing options that reflect changes in retirement planning or family circumstances.

Second, use the shift in buy-to-let dynamics to engage landlords about long-term planning. Whether they are remortgaging to manage cash flow, restructuring for succession, or diversifying portfolios, later life lending options can be part of the solution.

The FCA’s renewed focus on this sector, coupled with £9 trillion in housing wealth ⁽⁶⁾, signals that product development will continue to accelerate. Brokers who build these conversations into client reviews now will position themselves as trusted partners for the long term.

FUTURE PROSPECTS

Later life lending is no longer specialist, it is becoming the norm. And when combined with the wealth and borrowing needs of residential borrowers and landlords, it presents a powerful growth opportunity.

By recognising the overlap between these segments and tailoring advice accordingly, brokers can help clients unlock new options while strengthening their own business for the years ahead.

Chris Blewitt is head of intermediaries at Darlington Building Society

Notes 

1. Stonebridge, “Homeowners’ loan sizes rise as mortgage affordability changes take effect” – Mortgage Solutions, July 2025:
2. UK Finance, “Later Life Lending Update – Q2 2025”: ukfinance.org.uk
3. FTAdviser, “Average first-time buyer age rises, longer terms dominate”, 2024: ftadviser.com
4. FCA, Discussion Paper DP25/2 – The future of the mortgage market, June 2025: fca.org.uk
5. Resolution Foundation, “Intergenerational wealth transfers and housing wealth”, 2024: resolutionfoundation.org
6. Equity Release Council, “UK Housing Wealth Report 2024”: equityreleasecouncil.com