Lenders need reassurances from regulators over an approach towards older “last-time buyers”, the Council of Mortgage Lenders has said.
Speaking at the CML’s annual conference last week, the trade body’s head of policy June Deasy said there were challenges for lenders as the UK’s population ages.
She said carrying debt into retirement was a relatively recent phenomenon.
Traditional mortgage products are the main option for borrowers aged between 55 and 69, she said, while take-up of lifetime mortgages is more common in those aged over 70.
But more than a third of all loans currently advanced will extend beyond the borrower’s 65th birthday – a proportion which has been rising.
She said lending to older consumers presents considerable challenges and firms would like assurances from regulators they will not retrospectively take a negative view of sensible lending into retirement.
The range of financial choices for older borrowers – and the provision of services to them from different providers – present challenges in co-ordinating the existing advice regimes, Ms Deasy said.
She added that the CML will continue to work with the Financial Conduct Authority, the Money Advice Service, government and others to address these issues.
In September the FCA announced it was looking at relaxing some of its equity release rules over concerns they may be restricting the market.
These include making it easier for providers to offer a type of lifetime mortgage that allows consumers to choose when to stop making interest payments.
Equity release lender More 2 Life has predicted that the changes will lead to a boom in retirement lending.