There were 44,130 later life mortgages, with total lending in the quarter coming in at $8.6bn, representing a 7% decline in mortgage volumes when compared to the three months prior
The number of people getting new later life mortgages dropped in the third quarter of the year as the government’s stamp duty holiday came to an end.
According to UK Finance, there were 44,130 later life mortgages, with total lending in the quarter coming in at £6.46bn ($8.6bn). This represented a 7% decline in mortgage volumes, when compared to the three months prior.
Overall, lifetime mortgage volumes have remained modestly lower than prior to the COVID-19 pandemic, the research showed, but this reduction is expected to be temporary as the UK economy recovers.
The figures for the third quarter, however, did represent a 6% rise compared to volumes at the same time last year.
The overall quarterly reduction was a result of declines in the number of mortgages taken out by those aged between 55 and 69, which reflects lower house purchase volumes in the wider housing market, coincident with the unwinding of the stamp duty holiday, UK Finance said.
The latest data on Monday found that lending to older borrowers, those aged over 70, was stable across the period due to these borrowers accessing the market primarily through products that are not related to house purchase.
Meanwhile, Retirement Interest Only (RIO) mortgages, which were first launched in 2018, started to grow in popularity this year as more borrowers entered the market. Volumes are low compared to other later life products which is due in part to challenges for many borrowers in meeting the affordability requirements for a RIO mortgage.
While it can be difficult for borrowers to switch from an interest only mortgage to a RIO mortgage, RIOs are still an alternative product to lifetime mortgages, the trade association said.