The UK’s later life lending market is worth up to £153.9 billion, according to a research paper by AKG Financial Analytics, commissioned by Key Group.

The research paper also highlights that £54.9 billion worth of new lending and product switching took place in 2021 alone.

AKG defines the market as “standard, retirement interest-only or equity release mortgages for borrowers over the age of 55 with terms that extend into, or start during, retirement”.

And it’s a growing market.

More interest in unlocking property wealth

Over half (51%) of mortgage advisers have seen an increase in demand for advice on later life lending in the past year and 58% expect a further rise over the next 12 months.

Over three-quarters (77%) predict a rise in demand the next two to five years and 79% in the next six to 10 years.

Consumer research also revealed that over a third (35%) of older homeowners welcomed the ability to borrow in later life.

Simon Thompson, CEO at Key Group, said: “Today’s in-depth research paper clearly highlights that not only is the Later Life Lending market becoming a force to be reckoned with, but that customers, advisers, providers and trade bodies are keen to see it take its rightful place amongst the options people consider as they age.

“Equity release, retirement interest-only mortgages and standard mortgages taken out by older borrowers all have a role to play in helping people to achieve what they need and want in older age. As an industry, we need to step up to ensure that people can make their choices with confidence – comfortable in the knowledge that they are getting the best advice, products and support for their individual circumstances.”

Jim Boyd, CEO of the Equity Release Council, added: “This report not only outlines the challenges for the Later Life Lending market, but also the opportunities on the horizon and the significant role that equity release is set to play in tackling many of these issues.

“The sector is well placed to adapt to further future dynamic shifts such as the need to make older properties greener and the ongoing importance of intergenerational gifting. With equity release becoming ever more useful to a wider audience, the standards and safeguards we have established and continue to evolve will ensure that future generations of consumers can access products and advice of the highest possible calibre.”