Last year we discussed how the demand for mortgage borrowing into retirement had increased dramatically due to the ageing UK population and so far, 2019 has been an interesting one also for the later life lending market. The sector remains relatively stable with the number of available products with a higher max-age growing steadily.
An issue facing the ageing UK population currently is that there is an increasing individual responsibility for funding in retirement due to shrinking pension pots and longer life expectancy. When you also factor in lifestyle needs in later life then you can begin to understand why the market is experiencing a state of growth.
Our clients now have access to more later life products than ever and an increase in products means that there is greater flexibility with lower rates and more opportunities for customers to find the correct solution for their circumstances. There are now over 20.5 million people in the UK over the age of 55 who can now take advantage of these increasingly competitive products.
In 2016 there were just 70 later life lending products available on the market compared to 220 today with increasingly innovative products now available from several lenders both mainstream and specialised. Lenders such as Aldermore and Nationwide are leading the way with a whole host of products allowing older borrowers to borrow well above the age of 85.
Additionally, with more lenders entering the later life space interest rates are going down making for an increasingly competitive market. This has led to even more value for customers looking to borrow into retirement. Other factors such as the introduction of ERC-free partial repayments are allowing customers to pay off their mortgages with greater flexibility than ever before.
We can certainly see that later life lending is becoming more mainstream with many brokers agreeing that it has evolved from a plan of last resort into an estate planning tool as well as an effective way to pass down wealth to others. Indeed, you are beginning to see later life lending being used as a variation of “Bank of Mum & Dad” for helping first-time buyers purchase their first home.
Another prominent trend is the shift in the profile of customer with more and more people considering later life lending as a solution to raise funds for things such as purchasing holiday homes, paying for divorces and even going on holiday. Quite simply, borrowing into retirement is being utilised for a whole range of different purposes.
A key thing to consider with regards to the later life space is that the best products aren’t always easy to source and this is where we come in. We work with our clients to gain a comprehensive understanding of their circumstances and requirements meaning that we are in an excellent position to source the most suitable product on the most competitive terms.
If you would like to discuss how later life lending can help you or if you wish to discuss a mortgage enquiry give us a call on 0345 873 1234 or drop us an email at info@specialistmortgages.uk.com and we will get back to you.