Since I began working for LiveMore six months ago, what has struck me is just how many intermediaries are starting to ask about 50-90+ mortgages. The question is, why now? The savviest advisers have already picked up on the potential of this rapidly growing market, and they’re not the only ones. UK Finance data shows that the number of loans to over 55s in 2021 was 187,120 – 10.8% higher than in 2020. And total lending, at £28.1bn, was 21.7% higher. The figures should be even higher for 2022.
A market full of opportunity
What is immediately apparent about the 50-90+ market is the sheer size of the opportunities for intermediaries.
We live in an ageing population – the ONS says there are more over 65s than ever before in England and Wales – they're living longer, have considerable property wealth and want to get much more out of life whether they’re 50 or in their 90s.
They’re crying out for options to keep living the lives they love. Mortgages could provide many of the solutions they’re looking for but amazingly, borrower confidence in the market couldn’t be lower.
We commissioned research last year which showed that only 4% of people over the age of 50 believe they would be able to get a new mortgage, and that drops to 2% for those over 80.
Damning statistics like that are why LiveMore was founded in the first place. We believe anyone who can afford a mortgage should be able to access one. And that point is beginning to seriously pique the interest of intermediaries – no longer is age a barrier to the mortgage market, where there are increasingly logical options for their 50-90+ clients.
Much needed options in a changing landscape
A mortgage can help 50-90+ borrowers with all kinds of needs, whether they’re buying, downsizing to their dream holiday home, helping their kids onto the housing ladder, or something else.
These options will be welcome to intermediaries as they look ahead to the Financial Conduct Authority’s (FCA) incoming Consumer Duty rules. Under the regulation, intermediaries will be under more pressure than ever to ensure their clients are fully aware of all options available to them, as well as the likely outcomes of each choice.
To realise the long-term opportunities at stake, our industry needs more intermediaries to appreciate this great potential and be open to diversifying their business mix. Part of the challenge will include ensuring that regulatory changes like Consumer Duty don’t feed misconceptions that advising on this part of the market is challenging.
For example, many people believe that advisers need the qualification in equity release to advise on RIO mortgages, this is not the case as intermediaries only need to be CeMAP qualified to advise 50-90+ clients on RIO mortgages – the same as advising younger borrowers.
In the short term, meanwhile, there are also opportunities to build business with 50-90+ clients. For example, many interest-only mortgages are due to mature this year, and some borrowers may find they do not have the means to pay back the capital.
For those whose lender won’t extend the term of the mortgage – a situation we see all too often with customers at LiveMore – a good adviser should be able to source a viable alternative, such as a Retirement Interest-Only mortgage (RIO).
This presents opportunities for intermediaries who are willing to bridge the knowledge gap. Our research last year found that 69% of over 50s had never heard of mortgages with no end date for repayment, despite RIO products being ideal for so many people.
Now it’s over to intermediaries to inform borrowers aged 50-90+ that they have some excellent options available to help them with their next big plans in life.
We welcome most income and property types, and we always look for ways to say yes – even in ‘not your average’ cases.