Pure Retirements CEO Paul Carter discusses recent research into lifetime mortgage customers which highlights emerging trends and a deeper understanding to support better consumer outcomes.
As we look forward to the rest of the year, and off the back of the Equity Release Council’s encouraging Q4 figures, we thought it was worthwhile to share our research from our own data.
Looking at a number of key customer touchpoints, we wanted to paint a picture of what the modern lifetime mortgage customer looked like at the end of the year, helping to highlight emerging trends and helping to widen understanding to enable the delivery of best outcomes for consumers.
One in four people released funds for debt and mortgage repayments
Our loan usage data showed one in four people (25%) primarily releasing funds for debt and mortgage repayments – the highest it’s been on both a quarterly and annual basis (both 23%), and overtaking home improvements (23% in Q4 2024) as the most common reason for releasing funds.
One in ten (10%) of people continued to cite holidays as the main reason for accessing the equity in their home, a proportion that’s remained consistent over the past year.
Gifting and car purchases rounded out the top five most popular reasons, albeit with reductions in proportions. In Q4 2024 gifting accounted for 7% of primary usage for released funds, down from 10% in Q4 2023, while the proportion of released funds being used for car purchases also fell from 9% to 7% on an annual basis.
Shifts in plan type preference, application type, and single applicant gender
Our data also points to a preference toward drawdown plans, which accounted for 51% of new business. While this remains static on a quarterly basis, it represents a 7% annual swing, where only 44% of new business was on a drawdown basis in Q4 2023.
The proportion of customers taking out lifetime mortgages on a joint lives basis also increased, accounting for 59% of new business in Q4 and representing a 3% rise compared to Q3, and a 1% rise on an annual basis.
The amount of single life business coming from male applicants in Q4 2024 was the highest it’s been over the prior twelve months, at 37%. While still a minority compared to the 63% coming from female applicants, it nonetheless represents a 7% swing from Q3.
Average property values increase 24% in Q4
Additionally, we saw an average property value in Q4 of £400,900 – while a reduction from the mid-year peak of over £423,000 owing to the traditional Q4 seasonal lull in overall market activity, it still represents an uplift in average house value compared to the £391,300 seen in Q4 2023.
Around four in ten (39%) of new business came from properties in the £250,000-£399,000 value range, up from 37% in Q3. Additionally, just under one in four (24%) of new plans came from owners of properties valued at between £400,000 and £699,000 – however, this represents a decrease from the 27% seen in Q3 and the 25% seen in Q4 of 2023.
Conversely, the proportion of new lifetime mortgages being taken out from owners of properties valued at between £700,000 and £999,000 was the highest it’s been at any point over the preceding twelve months, accounting for 7% of our new business in Q4 2024 (compared to 5% in Q3 and 6% in Q4 2023).
The latest findings continue to demonstrate that the lifetime mortgage customer is constantly evolving, and that as an industry we need to remain proactive in identifying these trends and similarly evolving with them to continue offering effective lifetime mortgage solutions that meet a range of needs. It’s going to be a key challenge in 2025, and one which all of us at Pure Retirement are committed to meeting.
The views of contributors are not necessarily those of the Council
