The total of new loans advanced to older borrowers fell annually by 11.7% during the first quarter, new UK Finance figures have shown.

The banking trade body’s figures revealed that Q1 saw a total of 28,840 new loans advanced to older borrowers.

UK Finance also reported that the value of this lending reached £4.3bn, which was down 8.5% compared with the same quarter last year.

For lifetime mortgages, 5,060 were advanced in Q1 to represent a 30.1% decline year-on-year. The value of this lending slumped by 31.7% compared to Q1 in 2023, to total £410m.

Managing director of capital markets and finance at LiveMore, Simon Webb, said that UK Finance’s latest figures “paint a concerning picture”.

“There was a decrease of 11.7% in loans to older borrowers in Q1 2024 compared to the same quarter in 2023,” Webb said. “This continues the downward trend we witnessed in the latter half of 2023.

“This decline, despite an ageing population, is particularly worrying when we consider the potential rise in mortgage prisoners. Interest-only products can be a lifeline for these individuals, yet many remain unaware of their eligibility and options.”

UK Finance’s figures showed that a total 284 retirement interest-only mortgages were advanced in Q1, a level up 1.4% compared to Q1 last year, while the value of this lending climbed to £28m, up 16.7% on 2023.

The banking body’s data also revealed that residential later life loans in Q1 represented 7.9% of all residential loans, while buy-to-let (BTL) later life loans in Q1 represented 22.5% of all BTL loans.

“If there was ever a time for action in raising awareness amongst older borrowers, it’s now,” added Webb. “We’re doing all we can to support customers and ensure they can access suitable financial products to stay in their homes.”

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