The value of later life lending in the first quarter of 2025 increased by 43% year on year with nearly 40,000 new loans advanced to older borrowers; identified as those over the age of 55.
The latest UK Finance Later Life Lending Update covering Q1 2025 shows there were 38,510 new loans advanced to older borrowers in Q1, up 34% year on year; with a value of £6.1bn, an increase of 43% on the same time last year. The largest proportion of lending was within the 55-60 year old bracket, with 18,680 mortgages advanced at a value of £3.2bn, representing just under half of all new mortgage loans to later life borrowers (49%). 10,180 loans were advanced to 60-65 year olds, 4,820 to 65-70, and 4,830 to 70+. The numbers represent the largest volume of lending to the over 55’s since Q4 2022.
The figures also show 5,620 new lifetime mortgages advanced in Q1, up 11% year on year at a value of £530m and 339 retirement interest only mortgages advanced in Q1, up 19% year on year. In an indication of house price values continuing to increase, the numbers represent a near 40% increase in the value of lifetime mortgage advances, and 18% increase in retirement interest only mortgage advances.
In total there were 20,569 advances to later life borrowers for the purposes of purchasing a residential property with the the buy to let market for over 55s similarly buoyant at 12,660 – again both figures climbing back toward the most recent peak in 2022.
Retirees made up 7% of overall later life lending, up one third year on year, borrowing £190m to fund property purchases.
“The UK Finance Q1 2025 figures highlights that 7.6% of residential loans taken out in the first three months of the year were by borrowers who were over-55. The market is moving swiftly from niche to mainstream with increasing numbers of older customers relying on advisers to help them navigate their various options which include equity release, retirement interest-only mortgages and later life mortgages.
said Jim Boyd, CEO of the Equity Release Council, adding
“However, while the rise in equity release borrowing echoes the Council’s own Q1 figures, there is certainly scope for more growth as half (51%) of UK households are expected to need to use housing wealth to support their spending needs in retirement. The recently released Fairer Finance report suggested that if we overcome some of the barriers facing the later life lending market, we might see £21 billion injected into our economy each year from 2040, in today’s prices.
“This is substantially larger than the £6.2bn borrowed in Q1 2025 but highlights the potential for this market. Potential which we hope will be further explored as part of the FCA’s public discussion into lending into later life which is due to be launched before the end of Q2.”
While the figures are broadly positive there are ‘two sides’ to the later life lending coin say estate agency membership body Propertymark. On the one hand it is ‘encouraging’ to see the development of the later life lending market and better provisions for over 55’s says President Toby Leek. On the other hand this
“…could also be down to underlying issues regarding the cost of living and how this might be impacting many older borrowers, specifically because they are having to delay paying off their mortgages until much later in life. In addition, shifts in consumer needs could also be down to factors such as higher interest rates and ever-increasing household bills making a substantial dent in affordability.”
Simon Webb, managing director of capital markets and finance at LiveMore, added
“It’s encouraging to see continued growth in later life lending, reflecting the evolving financial needs of people in their 50s and beyond. Whether it’s helping children onto the property ladder, funding lifestyle changes, or managing existing debt, older borrowers are increasingly seeking flexible, tailored solutions. At LiveMore, we’re seeing strong demand across both mainstream and equity release products, driven by this shift. Our growth this year reflects the fact that many over-50s don’t fit the traditional lending mould and we’re proud to be developing solutions that work for them.”
