There is a new generation of customers emerging with different mortgage needs from the traditional equity release customer, according to new research from Air.

The later life lending platform has found that more than a quarter of later life advisers (28%) believe there is a need for lending products which can transition a customer from a capital and interest mortgage into a roll up equity release mortgage after an agreed term.

Air has launched its inaugural Comprehensive Conversations Report, detailing the demographic changes and adviser needs fuelling the current paradigm shift in the UK mortgage market.

Having received less benefit from the boom in property prices than their parents and having needed significantly higher multiples of loan to earnings to purchase their property, rather than having paid off mortgages as the previous generation, Air believes there are many individuals facing a need to extend mortgage debt into retirement.

Air CEO, Paul Glynn, commented: “The data showing the upcoming wave of older borrowers needing to manage mortgages into retirement is clear, detailed and inarguable. As a sector, we need to adapt now to be ready.

“For this new cohort of customers, we should be considering the mainstream residential and later life sectors as a continuum of lifetime borrowing needs.”

According to the later life lending firm’s report, advisers are already adapting to this sea change, with the vast majority highlighting the need for product innovation between residential and later life products.

The study found that 27% of advisers suggested products with more flexible criteria are the types of innovative features needed to address the demands of clients in the later life lending sector, while 26% pointed to products that more easily allow capital repayment.

Another 16% of the adviser sample reported that a lack of product options was a major problem for the industry.

Glynn added: “Bringing together the later life and traditional mortgage markets through triage and referral processes, innovating with hybrid products and ensuring greater collaboration across sectors will be no small feat, but will be essential to ensure good customer outcomes for this growing demographic and a strong future for our sector.”

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