It’s safe to say that the current economic outlook is presenting a number of challenges when it comes to the public’s attitudes to spending and making major financial decisions. However, it’s arguably another opportunity for the later life lending sector to again demonstrate its underlying resilience. While there’s the added complication of rising interest rate this time arounds, the current situation nonetheless presents similar conditions to the uncertainty seen around Brexit and the pandemic, where the lifetime mortgage sector prevailed.

The latest Equity Release Council figures add credence to a position of cautious optimism, headlined by a 36% year-on-year increase in new customers, with figures also showing an 8% increase compared to the previous quarter. While the majority of these figures can be attributed to an optimistic summer where overall consumer confidence was largely high (save for concerns around energy bills), the fact that September remained strong (with 4,319 new loans completed, comparing favourably with the 4,560 seen in March – a record prior to this quarter) even among growing storm clouds underline the fact that equity release is increasingly becoming a mainstream retirement planning tool.

The market’s underlying strength can be attributed largely to its adaptability, with widespread product development making equity release an increasingly flexible and attractive proposition. That in turn has bred a diversification in terms of customer base, and the scale with which the perception around lifetime mortgages and equity release has changed is illustrated well by the anecdotal evidence among consumers that it’s become accepted discourse in golf course clubhouses. Likewise, analysis of our own customer data between 2018 and 2021 has unearthed a marked uptick in activity among those from the higher-value property bands.

While the key headline has been a 500% increase in the proportion of our business coming from those owning properties of at least £1m (with a 60% increase from 2020 to 2021 alone), it’s worth looking at the wider holistic picture. Compared to 2018, the proportion of customers taking out plans who owned properties of at least £400,000 in 2021 has risen 75%, with a 23% increase between 2020 and 2021 alone. While rising property values have naturally had a hand in some of these trends, they don’t account for all of them by any means, and certainly don’t explain the patterns among those at the very top end of the property market.

Historically, those in higher property brackets have tended to use lifetime mortgages in estate planning, gifting them as living inheritances. Even amid the current market movements, this trend could likely still continue – indeed, it’s entirely possible that later life lending could be used to offset rising bills and mortgage repayments of family members through overpayments.

While it’s easy to view current conditions with a degree of pessimism, it’s important to remember that the market has shown its mettle amid similar uncertainty, and anecdotal evidence suggests consumer interest has yet to dim. The culture of innovation that has been at the forefront of the market’s development has led to a diversified customer base, and so it’s imperative the sector continues to take a holistic approach that offers solutions that appeal to a broad cross-section of customer needs and wants.