The average new lifetime mortgage borrower has seen the value of their home increase by more than £122,000 between 2018 and the first half of this year, data from a lender showed.
Research from Pure Retirement assessed the changing borrower profile in its paper, The Evolving Lifetime Mortgage Customer: an exploration of changing equity release demographics.
It found that the average property value of its borrowers in 2018 was £293,680, and by the halfway point of 2024, this had risen 42% to £415,746.
The report found that demand for drawdown plans was higher among borrowers with properties worth more than £850,000, and these borrowers were more likely to be aged 75 and over. Pure Retirement’s data showed they made up 41% of new business among this cohort in the first half of 2024.
However, lifetime mortgages are becoming more popular among the under-75s, as the analysis also found that the proportion of borrowers aged 75 and older had been declining since 2018.
Its borrowers aged up to 65 were more likely to live in homes worth £400,000 and under, making up 70% of this segment’s new business, and they were also more likely to be unmarried.
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It was also more common for this group of borrowers to be male.
Overall, 67% of all Pure Retirement’s single applicants in H1 2024 were women and 57% were married.
Lifetime mortgages mostly used for home renovations
A quarter of new loans were used for home improvements, closely followed by debt and mortgage repayments, which accounted for 23% of lifetime mortgage use.
Just 11% of borrowers used the money for holidays, while 9% used it for gifting and 9% to buy a car.
Gareth Ware (pictured), report author and communications manager at Pure Retirement, said: “We’re pleased to deliver this new research piece to the wider market, helping to highlight how the profile of a lifetime mortgage customer has evolved over a relatively short period of time, and hopefully helping to dispel some myths along the way.
“The new report also highlights the importance of the effective use of data, and the ways it can enhance understanding to offer appropriate product solutions and achieve best outcomes for consumers.”
