There were 33,840 new loans advanced to older borrowers in the third quarter of this year, a 2% rise on the same period a year ago.
The later life mortgage lending update from UK Finance showed the value of this lending was £5.2bn, a 9.7% year-on-year increase.
Richard Pike, chief sales and marketing officer at Phoebus, said the figures should “be taken positively”, noting they also represented increases on Q1, when 28,840 new loans were advanced at a value of £4.3bn.
He added: “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.”
Adrian Brewer, head of later life at Access Financial Services, said: “The market should feel extremely encouraged by these figures, especially bearing in mind the series of reasons that borrowers have had to delay financial decision-making. The election, the Budget, the Bank of England’s decisions around interest rates and so on have all factored into making 2024 a challenging year for the mortgage market, and yet UK Finance figures have shown consistent quarterly increases in later life mortgage lending this year, which is great news for our sector.
“I expect that when the dust has settled on the oscillations of 2024, we’ll see a significant further pick-up in lending in 2025.”
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Drop in lifetime mortgage sales, rise in RIOs
UK Finance’s data showed there was an 18.8% annual fall in new lifetime mortgages advanced during the period, totalling 5,830. The value of this lending amounted to £510m, 8.9% lower than a year ago.
However, this was up on Q2, which saw 5,610 advances at a value of £470m.
Some 306 retirement interest-only (RIO) mortgages were advanced during the quarter, 0.3% more than in 2023. This was valued at £28m, 10.7% more than the same period a year ago.
Compared to Q2, this was similar to the 326 RIOs advanced, which had a value of £30m.
There were 10,610 buy-to-let (BTL) mortgages advanced to later life borrowers, valued at £1.82bn. This represented annual increases of 2% and 11% respectively.
Compared to the previous quarter, BTL lending to older borrowers was slightly down on the 11,420 advances in Q2, valued at £1.94bn.
In Q3, residential later life mortgages represented 7.7% of all residential mortgages, while later life BTL loans made up 21.7% of the BTL mortgage market.
