The Intermediary – April 2025 - Flipbook - Page 57
L AT E R L I F E L E N D I N G
Opinion
Opportunities
prevail in later
life lending
M
any people now
live and work
well beyond the
traditional age of
retirement, either
because they need
or want to receive an income, or enjoy
the mental stimulation and personal
interactions that work can offer.
This presents both challenges and
opportunities to the later life lending
market, which has needed to adapt
quickly over the last few years as the
lifestyles and financial needs of those
over the age of 50 have evolved.
Demand in this area of the mortgage
market is expected to remain high,
with data from UK Finance showing
the number of mortgages taken out
by older borrowers tracking upwards,
rising 28.2% year-on-year in Q4 2024.
Similarly, data from specialist
mortgage lender Tembo has shown
that the number of first-time buyers
over the age of 50 has increased by 30%
over the past five years, with rising
house prices cited as the driving force
for people waiting longer to buy their
first home.
These figures reinforce how the
concept of retirement – and indeed,
homeownership – has changed
dramatically since the first known
building society was established in
1775, when the landlord of the Golden
Cross Inn in Birmingham devised
a plan for customers to pool their
savings until they had enough money
for everyone to build a house.
While the building society sector
has grown significantly since these
humble beginnings 250 years ago, it’s
fair to say that it has never lost sight
of its original purpose: to help its
members buy a home.
Today, building societies like
Loughborough Building Society
continue to focus on the needs of their
customer base, many of whom are
over the age of 50, and actively seek
out their local branch to discuss their
needs with staff.
This enables us to gain insight into
their lives, while continuing to focus
on niche markets, including the later
life lending sector, as we look for ways
to develop and enhance products that
meet the housing needs of these older
generations.
Changes to lending criteria, such as
removing the upper age limit on our
retirement proposition and allowing
borrowers taking a mortgage past the
age of 80 to have their income assessed
at 4.5-times up to retirement age,
have all been made to help improve
affordability among this demographic.
Other changes, such as allowing
borrowers to remortgage in order to
raise capital to bolster their savings
pot, were also made in response to
customer needs and demands.
By enhancing our criteria to
enable older borrowers to boost their
savings pot, they can now beer
plan for their retirement and use the
money for a combination of purposes
including home improvements, debt
consolidation, care home fees or even
to buy a new car.
Greater reach
Broadening the reach of flexible later
life lending solutions is imperative
in the current economic climate,
and every new product and policy
enhancement has been made in
response to the uptick in enquiries
from borrowers about their later life
lending options.
Meeting this demand is what
building societies were created to
do. It is also one of the reasons why
The Loughborough entered the
intermediary market in the first place.
Extending our reach by providing
ASHLEY PEARSON
is head of intermediaries at
Loughborough Building Society
Meeting this demand
is what building societies
were created to do”
brokers with more opportunity to
grow their client base and increase
their income stream is crucial in
today’s mortgage market.
Many older borrowers are facing
difficult decisions when it comes to
financing their retirement. Whether
this means continuing to work,
choosing to downsize, move closer
to their children or grandchildren or
explore options to fund their care or
general retirement, all these decisions
are highly emotive and carry a lot
of weight.
The later life lending sector now
has the solutions needed to help these
borrowers navigate major life stages
and empower them to make the most
of their later years.
Given the affordability challenges
currently facing all borrowers, this
presents brokers with an enormous
opportunity to think more broadly
and discuss later life lending options
with their older clients.
This may be unfamiliar territory
for some, but referring clients
and developing relationships with
lenders – and other specialists – that
are well-versed in this area will
not only provider brokers with the
information and support they need, it
will also ensure they achieve the best
and most suitable outcomes for their
older clients. ●
April 2025 | The Intermediary
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