The latest data from UK Finance has revealed a significant decrease in later life lending in the UK. In the first quarter of this year, there were 28,840 new loans advanced to older borrowers, indicating an 11.7% decrease compared to the same quarter last year. The total value of this lending amounted to £4.3 billion, reflecting an 8.5% decline from the previous year.
In addition, there were 5,060 new lifetime mortgages advanced in Q1, representing a substantial 30.1% decrease year-on-year. The value of this lending was £410 million, down by 31.7% compared to the same quarter in the previous year. On the other hand, there were 284 retirement interest-only mortgages advanced in Q1, showing a modest increase of 1.4% year-on-year. The value of this lending amounted to £28 million, marking a 16.7% rise compared to the same quarter a year earlier.
The figures further reveal that residential later life loans in Q1 represented 7.9% of all residential loans, while BTL later life loans accounted for 22.5% of all BTL loans during the same period.
Simon Webb, managing director of capital markets at LiveMore, expressed concern over the downward trend in lending to older borrowers. He highlighted the 11.7% decrease in loans during Q1 2024 as compared to the previous year, emphasizing the worrying nature of this decline, particularly in light of an ageing population. Webb also raised the issue of potential mortgage prisoners, noting the importance of interest-only products as a lifeline for these individuals, many of whom may be unaware of their eligibility and options.
These statistics underscore the challenges facing older borrowers in securing loans, especially in the current economic climate. With the ongoing impact of the pandemic, coupled with broader economic uncertainties, it is imperative for lenders and financial institutions to explore alternative solutions and support mechanisms for older individuals seeking financial assistance.
In light of these developments, it is essential for industry stakeholders to collaborate on initiatives that raise awareness about the available options for older borrowers. By providing access to clear and comprehensive information, as well as tailored financial products, it is possible to address the needs of this demographic and ensure they have the necessary support to navigate the lending landscape effectively.
The declining trend in later life lending underscores the importance of proactive measures to address the evolving needs of older borrowers in the UK. It is vital for the financial industry to adapt to these changing dynamics and offer viable solutions that cater to the unique requirements of this demographic, thereby fostering inclusive and sustainable lending practices.