Later life lending falls 37% in Q4: UK Finance

“When we see these types of figures it rings alarm bells about the potential increasing number of mortgage prisoners in the UK.”
– Simon Webb, managing director of capital markets and finance at LiveMore

There were 29,060 new loans advanced to older borrowers in Q4, down 37.1% year-on-year, according to the latest data from UK Finance.

The value of this lending was £4.1bn, down 42.4% compared with the same quarter in 2022.

Broken down by product type, the data shows that there were 6,710 new lifetime mortgages advanced in Q4, down 40.1% year-on-year, with a total value of £520m, down 57.4%.

The number of retirement interest-only mortgages fell 43.3% by volume and 38.1% by value.

Residential later life loans represented 7.38% of all residential loans in Q4, while buy-to-let later life loans represented 21.98% of all buy-to-let loans.

Simon Webb, managing director of capital markets and finance at LiveMore, commented: “It is indicative of our still-turbulent market that, despite an ageing population and an increase of later life mortgage products available, we’re seeing this sharp decrease of 37% in loans to older borrowers in Q4 2023 compared to the same quarter in 2022. That said, borrowing was unusually high following the 23 September 2022 Stamp Duty Land Tax (SDLT) increase to thresholds, when the over-55s realised they could tap into the equity in their property.

“When we see these types of figures it rings alarm bells about the potential increasing number of mortgage prisoners in the UK. Interest-only mortgages can help mortgage prisoners who can’t meet affordability criteria as well as those with interest only mortgages due to mature but have no repayment plan in place. Without suitable products, these two groups of customers would otherwise have to sell up or pay very high interest rates.”