Lending expected to further rise in 2025
The number of new loans advanced to older borrowers in the UK rose by 2% year-on-year in the third quarter of 2024, according to the latest figures from UK Finance.
The trade association’s quarterly later life mortgage lending update shows 33,840 loans were issued to borrowers aged 55 and older in the third quarter of this year, with the total value of lending reaching £5.2 billion — a 9.7% increase compared to the same period in 2023.
The report, which tracks trends and demographics in later life lending, revealed mixed results across different product types.
Lifetime mortgages saw a sharp decline, with 5,830 loans advanced in Q3, down 18.8% year-on-year. The total value of this lending fell by 8.9% to £510 million.
In contrast, retirement interest-only (RIO) mortgages experienced modest growth. A total of 306 RIO loans were advanced during the quarter, up 0.3% year-on-year. The value of RIO lending rose more significantly, increasing by 10.7% to £28 million.
Residential later life loans accounted for 7.7% of all residential lending in Q3, while buy-to-let later life loans made up 21.7% of all BTL lending, the UK Finance report showed.
Richard Pike (pictured), chief sales and marketing officer at Phoebus Software, said the data highlights positive momentum in the later life lending market.
“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,” he added. “The value of lending is up from £4.3 billion in Q1 to £5.2 billion in Q3. While the number 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.
“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.”
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