Broadening Lending Criteria Alongside product innovation, underwriting practices continue to evolve. Historically, later life lending criteria could prove restrictive for customers with nonstandard properties, complex income arrangements or circumstances that fell outside traditional lending models. However, lenders have gradually expanded their appetite in response to changing demographics and growing demand. This trend is particularly relevant as the Financial Conduct Authority continues its focused review of later life borrowing. Increased regulatory scrutiny is encouraging firms to enhance advice processes, strengthen customer outcomes and ensure products remain aligned with the realities of modern retirement. The result is a market that is becoming increasingly sophisticated in its approach to assessing both borrower and property risk. 9 Spray Foam Insulation: An Emerging Area of Change One area where this evolution is becoming particularly visible is the treatment of properties affected by spray foam insulation. The issue has become increasingly prominent across both the residential mortgage and later life lending sectors. Many homeowners installed spray foam insulation through energy-efficiency initiatives or government-backed schemes, only to encounter difficulties when seeking to sell, remortgage or access borrowing against their property. Historically, many lenders adopted cautious approaches, often declining applications involving spray foam insulation unless remediation had already been completed. This created significant challenges for affected homeowners, particularly those seeking to access housing wealth in later life. However, parts of the market are beginning to explore more nuanced solutions. While spray foam insulation remains a complex area requiring specialist assessment, there is growing recognition that not all installations present identical risks. In response, some lenders are considering alternative underwriting approaches and, in certain circumstances, mechanisms that may facilitate remedial works as part of the borrowing process. This represents a notable shift away from blanket policy decisions towards more individualised property assessments. Although underwriting standards remain appropriately robust, innovation in this area may create additional pathways for homeowners who would previously have found themselves excluded from the market. Continued on next page...
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