four min read

Lifetime mortgages popularity soaring amongst wealthier homeowners

Posted in: Research

  • Homes OneFamily lends on are worth 59% more than average UK property[i], at £370,000 versus £232,000
  • Properties lent on in the North East are 60% higher than the cost of an average home[ii], 50% higher than the South East[iii] and 69% more in London[iv]
  • Average age of a OneFamily lifetime mortgage customer is now 68 demonstrating the increased use of the product for those at the start of retirement

According to OneFamily data, the price of a property OneFamily lends on is now 59% higher than average, at £370,483 versus a nationwide price of £232,554.

The trend for increasingly expensive homes being used for OneFamily Lifetime Mortgages demonstrates they are being used as a product of choice in retirement planning for an increasing number of homeowners. This is also borne out by the average age of a lifetime mortgage customer, which is now 68. Traditionally it would have been older homeowners that would have used this product for the later years in life to pay for essential costs, but it is increasingly being used as part of holistic retirement planning alongside pensions, and for paying for lifestyle goals.

Nici Audhlam-Gardiner, Managing Director of Lifetime Mortgages at OneFamily said

“As the data shows, equity release is no longer a reaction for consumers to make up a savings shortfall but rather a proactive decision to make the most of their largest asset. Many older homeowners have significant amounts of money tied up in their homes and want to be able to enjoy their later years. This also means we are seeing a younger generation of customers who are at the point of retirement and want to realise their lifetime dreams whilst they are still in good health.

“We are also seeing more diverse reasons for people to access the capital in their home, and many more accessing it to fund what could be seen as relatively luxury activities such as travel, buying second properties, and helping younger family members get onto the property ladder.

“The products that OneFamily offers are, in part, driving this trend, with many wealthier homeowners choosing a mortgage on which they can pay the interest monthly thus avoiding roll up costs. Homeowners taking out a OneFamily lifetime mortgage have the option to pay the interest back monthly, pay up to 10% of the total value of the loan each year or pay no interest until the end of the loan.”

Regionally there are significant variances with the average price of a home in London being used to release capital now £816,000, compared to the average property sold in the area being £482,000. In the South East outside London, the value of properties being lent against is £493,000 versus a regional average property cost of £328,000

Regional prices of property versus OneFamily Lifetime Mortgage customer properties

Region Average property price (house price index) Average OneFamily lends on Percentage difference OneFamily vs the average
East Anglia £294,027 £401,518 37%
East Midlands £194,803 £214,976 10%
London £482,241 £816,076 69%
North East £132,049 £211,430 60%
North West £162,915 £231,795 42%
Scotland £152,961 £203,671 33%
South East £328,059 £493,691 50%
South West £260,142 £346,571 33%
Wales £162,089 £193,020 16%
West Midlands £199,763 £286,113 43%
Yorkshire & Humber £162,009 £243,268 50%
Average £232,554 £370,483 59%

[i] Average UK property price is £232,554, average property value for a OneFamily Lifetime Mortgage is £370,483 as of November 2018
[ii] Average price in North East is £132,049, average OneFamily lends on is £211,430
[iii] Average price in the South East is £328,059, average OneFamily lends on is £493,691
[iv] Average price in London is £482,241, average OneFamily lends on is £816,076