Average property value of a lifetime mortgage customer passes £500,000

Mortgage Introducer

November 12, 2021

The average property value of a lifetime mortgage customer has passed the £500,000, research from later life mortgage broker Responsible Life has revealed. 

The average home value for lifetime mortgage borrowers reached £539,844 in October, up £84,367 in 12 months, according to the broker’s analysis.

This represents an 18.5% increase on the £455,477 average value in October 2020 and an enormous 31% jump on the £412,090 recorded in October 2019, before the pandemic struck.

There has also been an increase in the number of customer properties exceeding £750,000 in value.

Nearly one in six homes (15.8%) used to secure a lifetime mortgage are now worth more than three-quarters of a million pounds — up from 11.4% two years ago.

Meanwhile, the average amount released by lifetime mortgage customers has also been climbing sharply. Over the past 12 months the average release amount has risen 9.3% to £115,207 — and is now 42.96% above where it was at the same point pre-pandemic (October 20193).

Rates on lifetime mortgages have more than halved in recent years to below 3% in many cases.

Steve Wilkie, executive chairman of Responsible Life, said: “Lifetime mortgages are exploding in popularity but that doesn’t tell the whole story. This research underlines how they are also attracting an increasingly diverse and wealthy audience.

“The pension gap that separates what retirees need in retirement and what their savings will afford them is not just a problem for the least well off, and plenty of wealthier homeowners who want to stay in their own homes face this dilemma.

“Amid a worsening cost of living crisis, lifetime mortgages are finding a firm foothold with aspirational retirees, who are looking to find ways to close the affordability gap on the lifestyle they want to continue enjoying in later life.”

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