Wednesday, February 12, 2025
HomeMortgageMerging of later life and mainstream mortgages won’t happen overnight

Merging of later life and mainstream mortgages won’t happen overnight



It will take some time for later life products to truly bridge with the mainstream mortgage sector, but customer circumstances are already showing a need for this, it was said at an industry conference.

During a panel discussion at the Later Life Lending Event, held by Mortgage Solutions, Dan Osman, head of later life lending at UK Moneyman, said a more holistic approach was needed in the later life sector and conversations needed to be centred on servicing interest or transitional products, as well as looking at how a phased approach could be better than looking at singular products. 

He said his firm was also seeing a “massive surge” in older first-time buyers. 

This included “people who had been in rental accommodation their whole lives and they’re now facing a massive insecurity of landlords selling the property, of rents going up, and buying seems to be a logical solution for them,” Osman said. 

He also added there could be “increased vulnerability” from these borrowers, as they would have never dealt with a mortgage before and could be seeking advice in their 70s or 80s. 

“The challenge there is one of education before you can even start to give the advice,” Osman said. 


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Chris Flowers, intermediary sales director at Royal London Equity Release, said the sector sometimes forgot there was a “bigger world” outside of later life lending and the problem was many customers did not have financial advice. Flowers said it was important to make sure this was accessible to clients. 

He also said advisers sometimes asked clients if they wanted a two- or five-year fix without considering their longer-term plans for retirement. 

Speaking about the later life and mainstream mortgage markets coming together, Flowers said: “We have to acknowledge this isn’t going to happen overnight. It’s going to take a long time for the later life products to be able to merge into the mortgage sector.” 

He said sourcing systems did not always help as they did not present every possible solution for clients. 

 

Products addressing changing customer needs

Sanjay Gadhia, head of sales at Standard Life Home Finance, also said the average age of the first-time buyer was climbing and someone in their mid-to-late 30s taking a 30-year term meant they were already being taken into later life lending. 

He said “the challenges we’re facing in later life have already been occurring for a number of years”, but this was being embraced by more lenders offering products where borrowers could service the interest. 

“I can only see that area growing more,” Gadhia added. 

Pat Oldham, equity release proposition director at LV, said the number of people working in retirement was growing and was projected to increase from a fifth of that population to a quarter. He also said the retirement age being put back meant people had to work for longer. 

“If you look at customers in the age bracket of 55 to 64, 61% are saying they’re not confident they’ve got enough money to see them through retirement and that’s really quite concerning,” Oldham said. 

He added that this was one of the drivers behind the average age of a later life borrower falling, as some had already dipped into their savings to support their finances, meaning looking at their housing wealth was the next option. 

Oldham said ERC-free features were “really powerful” in helping these borrowers too. 





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