New loans to older borrowers declined nearly 5%, but total lending value edged higher
The number of new loans advanced to older borrowers fell 4.8% year on year in the first quarter of 2025, according to UK Finance data.
Despite the drop in number, the value of that lending rose marginally to £6 billion, up 0.3% on the same period a year earlier.
Across the later life lending market, 36,050 new loans were advanced to borrowers aged over 55 in Q1. Lifetime mortgage activity declined more sharply, with 5,300 new products taken out — down 8% year on year and 7.2% on Q4.
The value of lifetime mortgage lending stood at £490 million. Retirement interest-only (RIO) mortgages bucked the trend, with 353 advanced in the quarter, a 5.4% annual increase, though their total value of £33 million was unchanged from a year earlier.
Later life lending continued to account for a significant share of overall mortgage activity. Residential later life loans represented 8.2% of all residential lending in Q1, while buy-to-let later life loans accounted for 20.1% of all BTL loans.
"Retirement is increasingly becoming a balancing act between pensions, savings and property wealth, and today's figures reflect that shift," said Jim Boyd (pictured right), chief executive of the Equity Release Council. "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."
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