Paul Carter, CEO at Pure Retirement shares insights into property and customer trends, highlighting interesting outcomes gained from their data. Read on to find out more.
In recent years, the lifetime mortgage sector has become an increasingly effective tool for over-55s seeking to enhance their income in later life, whether that’s through aspirational purchases such as cars and holidays, improving their home, gifting to their family, or repaying existing debts and mortgages.
The end result is a constantly shifting customer profile, with changes often being seen on a quarter-by-quarter. We wanted to highlight some of the shifts we’ve found when analysing our Q3 customer data, by extension offering a window into what the modern equity release customer looks like.
Property trends
According to our data, the average property value increased on both a quarterly and annual basis and is at among the highest level we’ve ever recorded for a single quarter. At £423,434, the average Q3 house value among new customers represents a 4% annual increase (from £406,805 in Q3 2023), and a 3.2% increase on a quarterly basis (up from £409,811).
This represents a shift even after factoring national house prices increases – according to Nationwide’s house price index this rose 2.5% annually and 0.7% quarterly (meaning that the average house price value among new lifetime mortgage customers has risen nearly five times as fast as the national average over the last quarter).
The majority of cases continue to come from owners of properties valued at between £250,000 and £399,999, which account for nearly one in four (37%) of cases. Owners of £1m+ properties remain static in accounting for around 4% of all new initial advances.
Customer trends
We found that, for the first time since we started tracking this data, there is a preference for drawdown over lump sum plans among new customers in Q3. Over the last quarter, 51% of new customers chose this plan – this is in stark contrast to a year ago (where only 41% of new customers preferred drawdown plans) and Q2 of this year (where 46% chose drawdown plans).
Among single life applicants the proportion being female continues to grow, and currently sits at 70%. This contrasts with the 64% at the same point a year ago, and 67% in Q2.
Loan usage patterns
| Loan usage Q2 2024 | Loan usage Q3 2024 | Loan usage Q3 2023 |
| Home improvements – 25% | Home improvements – 24% | Home improvements – 24% |
| Repaying debts/mortgage – 25% | Repaying debts/mortgage – 23% | Repaying debts/mortgage -22% |
| Holiday – 10% | Holiday – 11% | Gifting – 11% |
| Gifting – 9% | Gifting – 9% | Holiday – 10% |
| Car – 9% | Car – 8% | Car – 8% |
Overall loan usage has remained remarkably static on both a quarter-on-quarter and year-on-year basis, both in terms of the top five most common uses, and the proportion of business they represent.
Splitting out loan usage among drawdown and lump sum highlights the different ways these two cohorts use released funds, however. Lump sum customers are far more likely to use their released funds for needs-based reasons, with the 31% proportion being both twice as high as that seen among drawdown customers, and a 4% rise year-on-year.
On the flipside, 15% of drawdown customers released funds for holidays (a consistent level over the past year), while this particular use hasn’t been seen in the top five uses among lumpsum customers at all in 2024.
These latest figures continue to underline the importance of effectively using data to fully understand customers so that in turn we, as a sector, can continue to deliver best outcomes for them.
The increasing levels of activity among younger and single female applicants, as well as the divergent usage patterns among lump sum and drawdown customers, highlight the diverse audience lifetime mortgages have continued to serve throughout 2024, providing exciting opportunities for the market going forward.
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