The Intermediary – July 2025 - Flipbook - Page 9
This supports a broader trend identified
by Pick, who sees borrowing split between
UK FINANCE UPDATE
“necessity-driven and aspiration-driven”
motivations. Among the latter, intergenerational
gifting is becoming a more visible feature of
later life lending, even if it still accounts for a
In Numbers
smaller proportion of cases. In many cases, older
borrowers choose to release equity to help the
next generation climb the property ladder, thus
helping them gain a degree of financial freedom
earlier in life.
Pick explains: “The ‘Bank of Mum and Dad’ sits
comfortably in the top 10 lending sources in the
UK”, while Batty notes that 10% of all mortgage
◆ 38,510 new loans were advanced
to older borrowers in Q1 2025,
up 33.5% year-on-year.
applications are for gifting purposes.
Gregory adds that gifting to children or
◆ The value of this lending was
grandchildren for house deposits or debt
reduction “has grown significantly in recent
years,” and is expected to rise further as wealth
is increasingly passed down during people's
£6.1bn, which was up 42.6%
compared with the same
quarter a year previously.
lifetimes, not after death.
Diversifying demographics
◆ There were 5,620 new lifetime
As reasons for later life lending continue
to evolve, the market is actively adapting to
mortgages advanced in Q1, up
suit the needs of a diverse range of borrower
11.1% year-on-year.
profiles. Despite historical stereotypes, older
homeowners are far from a monolith – now
boasting varying borrower types experiencing
◆ The value of this lending was
different personal circumstances. Among the
most prominent emerging sub-demographics are
divorced individuals navigating asset separation,
and older single women or widows managing
£530m, which was up 39.5%
compared with the same
quarter a year previously.
retirement independently.
Gregory notes the growing number of single
women borrowers over 60 who are “often looking
for long-term aspirational capital, or stability
and autonomy,” particularly as many outlive their
spouses and face increased financial pressures in
later life.
Equity release, he explains, enables them “to
◆ There were 339 retirement
interest only mortgages
advanced in Q1, up 19.4%
year-on-year.
unlock housing wealth to fund retirement, cover
care costs, or to help family members.”
Pick highlights the disproportionate impact of
bereavement on women in later life. “The average
life expectancy for women in the UK is four years
longer than that of men,” meaning many widows
“find themselves living alone post-bereavement,”
◆ The value of this lending was
£33m, which was up 17.9%
compared with the same
quarter a year previously.
often relying on reduced or discontinued
spouse pensions.
He adds: “This income drop drives demand for
releasing capital from their homes to maintain
their standard of living. Post-bereavement, many
widows wish to remain in their family homes
◆ Residential later life loans
in Q1 represented 7.6% of all
residential loans.
or stay close to social networks, and later life
lending can support this need.”
◆ Buy-to-let later life loans in Q1
Gregory observes that homeowners who are
represented 21.5% of all buy-to-
divorced – or planning for divorce – often
turn to equity release “to retain the family
p
let loans.
