Around 54% of advisers are expecting an increase in later life lending enquiries in the next 12 months, a report has found.
According to a report from Key, the rise in later life enquiries is driven by the launch of new deals and growing confidence in the housing market, cited by 35% and 34% of advisers.
More than a quarter said house price increases will drive increased demand over the next year and 26% pointed to further base rate reductions.
Approximately 59% said they had reported a growth in later life enquiries or have already reported an increase in later life enquiries in the last year.
Key said there were “high levels [of] untapped demand”, which it estimated at around £30bn.
The company said all types of advisers “should be considering all options” for clients in later life.
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This includes incorporating property wealth as part of retirement accumulation and decumulation planning strategies and exploring lifetime mortgages, as well as other specialist later life lending products, for customers over the age of 50 looking to take debt into retirement.
Advisers say nearly half of clients would benefit from later life lending
Around 87% of advisers surveyed said they have customers who would benefit from later life lending products; this includes 38% who said this would be the case for over half of their clients.
On average, advisers said around 45% of their clients would benefit from later life lending solutions.
Approximately 93% said they have at least one client per month asking for later life lending clients and 47% said they receive enquiries at least once per week.
However, only 36% of advisers said they would look at all the options.
‘Optimism’ in the market but still off high of 2022
Will Hale, group director at Key, said “optimism about the later life lending market remains relatively high, with the year ahead looking positive following a reasonable past 12 months”.
He continued: “However, we remain a long way off the highs of 2022, and although there are signs of a recovery, it continues to be a challenging period for specialist advisers and lenders.
“The real cause for optimism is that advisers are recognising that more of their clients would benefit from later life lending solutions, with almost all seeing enquiries at least on a monthly basis.”
Hale said the challenge was “translating untapped demand into material market expansion so more customers can benefit from these modern later life lending products that are well-positioned to address the wants and needs of the over-50s”.
“The key barrier is advisers generally focusing on their own area of expertise and not thinking more widely. We must continue to encourage advisers to consider all options and to put trusted referral relationships in place with other specialists in order to achieve better outcomes for customers,” he noted.
