The Intermediary – March 2025 - Flipbook - Page 66
L AT E R L I F E L E N D I N G
Opinion
Exploring later life
lending in 2025
VICTORIA CLARK
is head of lending at
The Right Mortgage &
Protection Network
2025 has the potential to be a great year for the later life lending sector
T
he later life lending
market is showing
promising momentum
as we move through
2025, with the latest
figures from the Equity
Release Council (ERC) highlighting a
steady recovery and positive growth in
the sector.
The data shows more than 15,000
customers in Q4 2024 engaged with
the lifetime mortgage market – the
first time this figure has been breached
in over a year – marking a notable
resurgence in activity. In total, lending
increased for the third consecutive
quarter, reaching £622m – up 16%
from £525m in Q3 2024.
This upward trend in sales growth
is great news for the later life lending
market, which has seen sales plateau
in recent years due to increased
economic uncertainty.
However, with interest rates slowly
falling and consumer confidence
starting to return, the next 12 months
look to be more promising for
the sector.
One of the key drivers for growth
has been the evolution of the market
and the introduction of more
innovative and diverse later life
lending solutions.
This includes products like Interest
Reward lifetime mortgages that focus
on improving borrower affordability
by allowing the borrower to pay some
or all of the interest each month.
One of the many benefits of this
type of product is that it enables later
life lending borrowers to access a
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The Intermediary | March 2025
beer rate and prevent interest rolling
up, either entirely, or at a much slower
pace. For some, these innovations
have made later life lending a more
aractive and sustainable option
by providing them with greater
financial flexibility.
Other products such as retirement
interest-only (RIO) mortgages and
mainstream mortgages for older
borrowers have also gained significant
traction over the last few years.
This has also opened up the market
to a broader pool of borrowers
by appealing to those seeking
products that align with income
and affordability rather than
property income.
Security and affordability
As the market continues to evolve,
2025 has the potential to be a great year
for the later life lending sector.
With more lenders starting to focus
on developing solutions that balance
financial security with affordability
to appeal to a greater number of
borrowers, it is likely more people will
start to explore the options available in
the market.
This presents an opportunity for
advisers to consider whether they are
in a position to offer these types of
products to their clients.
For those that are not, working
out what they need to do to become
authorised or establish a referral or
introducer agreement should be a
priority as the year progresses.
Tapping into the later life lending
market opens up increased business
potential, which can provide
an additional source of revenue
for advisers.
Given the growing blurring of
boundaries between the mainstream
and later life lending sectors, it is
also best practice in a Consumer
Duty world where holistic advice and
consumer outcomes are paramount.
Having at least one adviser within
the business who is able to advise
across all later life lending options,
including lifetime mortgages, RIO
and mainstream mortgages for older
borrowers will ensure the needs of this
demographic are met. It will also help
to satisfy regulatory requirements.
For some adviser firms and sole
traders, this may mean seeking help
from a network like ourselves.
A network which prides itself on
training, supporting and accrediting
in being a specialist in the later life
lending market.
Also, being part of a wider network
enables advisers to refer the client if
they prefer, leaving them free to focus
on other aspects of their business.
As the UK population gets older
and people continue to work and live
for longer than ever before, demand
for later life lending products is set
to increase.
As such, 2025 and beyond promises
to be a big year for the sector.
For advisers working in the later
life lending space, or those just
starting to grow into the sector, being
part of a network that can provide
the support, resources and access to
products – while having access to
some of the market’s leading whole
of market commission rates – is
the key to making the most of the
opportunities available. ●
