More than half (54%) of advisers are expecting a rise in enquiries about later life lending in the next 12 months, new research from Key Later Life Finance has revealed.

The equity release adviser suggested this will be driven by the launch of new products and increased confidence in the housing market.

Key’s findings, based on a study of 200 UK financial advisers, showed that around a third (35%) who are expecting a rise in enquiries said that part of the reason is the development of new later life lending products for specific customer needs, while 34% pointed to growing confidence in the housing market.

More than a quarter (27%) said house prices rises would drive increased demand over the next year, while 26% of respondents highlighted further Bank of England base rate reductions.

“Optimism about the later life lending market remains relatively high with the year ahead looking positive following a reasonable past 12 months,” said Key group director, Will Hale.

“However, we remain a long way off the highs of 2022 and although there are signs of a recovery it continues to be a challenging period for specialist advisers and lenders.

“The real cause for optimism is that advisers are recognising that more of their clients would benefit from later life lending solutions with almost all seeing enquires at least on a monthly basis.”

However, Key’s research also identified high levels of untapped demand providing support for the belief that the later life lending market – estimated to be worth £30bn – is not achieving its potential.

The research also indicated that advisers appear to be limited in what they can recommend or advise, with less than two in five (36%) saying they would look at all options.

Hale added: “The challenge is of course translating untapped demand into material market expansion so more customers can benefit from these modern later life lending products that are well-positioned to address the wants and needs of the over-50s.

“The key barrier is advisers generally focusing on their own area of expertise and not thinking more widely. We must continue to encourage advisers to consider all options and to put trusted referral relationships in place with other specialists in order to achieve better outcomes for customers.”

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