Later Life Mortgage Lending

Quarterly insight into mortgage lending to borrowers over age 55, the trends in lending and demographics of borrowers accessing the market.

Latest Data - Q4 2021

Published on 21/02/2022

Key data highlights:

  • There were 187,120 new mortgages to borrowers over 55 years of age completed in 2021, with total lending in the year of £28.1 billion. Compared with 2020, this represents an 11 per cent increase in mortgage volumes and a 22 per cent increase in the value of lending (slightly lower than the 27 per cent increase in the value of lending for the whole mortgage market in 2021). This is the highest annual volume and value of mortgages to borrowers over age 55 since 2014 when these data began to be collected.
  • This increase in mortgage lending to older borrowers was driven in large part by the stamp duty holiday, which encouraged homeowners of all ages to move homes or expand their property portfolios.
  • This activity slowed towards the end of the year. There were 44,590 new mortgages to borrowers over age 55 in Q4 2021, with total lending in the quarter of £6.8 billion. This represents a decline in volume of mortgages of 2.6 per cent compared with the previous quarter, and a decline of 3.6 per cent compared with the same quarter in the previous year.
  • This decline in quarterly volumes is driven largely by the end of the stamp duty holiday in September 2021. Many borrowers had completed purchases earlier in the year to take advantage of the savings available through this government scheme, leading to a modest decline in demand in house purchase towards the end of 2021.
  • The volume of lifetime mortgages in Q4 2021 was 10,860. This represents an increase of 7.5 per cent compared with the previous quarter.
  • Lifetime mortgage volumes have remained broadly stable since the beginning of the Covid-19 pandemic. This follows a substantial rise in activity since 2016, due to innovations in lifetime products since 2012 that have allowed for additional flexibility and further equity available to borrowers, driven by rising house prices

Charles Roe, Director of Mortgages at UK Finance said:

There's been growing demand for mortgages from those aged over 55 and this is set to continue as more people live and work for longer.

"For the first time since records began more than half of all new mortgages are due to end after the homeowner's 65th birthday, and lending to over 55s has grown even where mortgage lending in the wider market has remained subdued.

"Later life lending both now and in the future will be imperative as existing homeowners look to later life products for accessing equity as they get older.

Jim Boyd, Chief Executive of the Equity Release Council said:

UK Finance's findings underscore the integral role that later life lending plays in consumers' long-term security. Attitudes towards home finance in later life have changed, and homeowners are increasingly comfortable with mortgage borrowing into retirement and open to the benefits of realising some of their property wealth as they age.

"Property wealth can play an important part in a holistic approach to funding retirement and, as an industry, we must work together to ensure consumers get the information they need to weigh up increasingly complex financial decisions to do this.