Home loans to older borrowers rocket during Covid

The volume of home loans taken out by those over the age of 55 has increased by 11% between 2020 and 2021, according to data released by UK Finance. 

The statistics also show a 22% increase in lending value over the same period. In 2021, there were a total of 187,120 mortgages taken by those aged 55 and over, at a much higher value than the previous year, totaling £28.1bn. 

Callum Bilbe, a data and research analyst at UK Finance, explained that the increase in mortgage lending to older borrowers was driven partly by the stamp duty holiday, which encouraged homeowners of all ages to move homes or expand their property portfolios.

Despite 2021 seeing the highest number of mortgages to post 55 borrowers since data collection began in 2014, activity slowed in the fourth quarter, with a 2.6% decline the in volume of mortgages compared to Q3. Q4 saw lending totals of £6.8bn across 44,590 new mortgages. 

The decline in Q4 was attributed to the UK government’s stamp duty relief programme coming to an end. 

Although it saw a 3.6% decline from the same quarter in the previous year, Q4 of 2021 saw a 7.5% increase in lifetime mortgages from 2021’s Q3, with 10,860 being taken out. 

“Lifetime mortgage volumes have remained broadly stable since the beginning of the Covid-19

Pandemic,” Bilbe said in a report. 

“This follows a substantial rise in activity since 2016, due to innovations in lifetime products since 2012 that have allowed for additional flexibility and further equity available to borrowers, driven by rising house prices.”

The full six-page data report and analysis is available to download, here.