Is later life lending here to stay?

Published: 09/07/2015

Head of Property Lynne McCaffrey reviews the housing market in this time of unprecedented change.

“There’s been a more than four-fold increase in housing stock rented to 35 to 49-year-olds across the UK in the last 14 years. This change has been driven by a number of factors – the lack of housing pushing up prices so that a property deposit is beyond the means of many whilst renting is becoming more socially acceptable and work patterns dictating that many people now need a more flexible lifestyle.

“This means that there are a growing number of buyers who are entering the housing market later in life. Alongside that, with increased property prices mortgage terms have been getting longer. Recent changes in pensions and the removal of a compulsory retirement age has meant that the lines between work and retirement are increasingly blurred and more people are choosing to work beyond the conventional retirement age and are looking to continue their mortgages whilst they are still earning. Indeed recent research has revealed that one in five households headed by someone aged over 50 and one in ten older householders (65+) had outstanding mortgage borrowing on their main home during 2008 to 2010.

“These changes – an ageing population, a new pensions regime, retirement delay and a delay in house purchase have all contributed to a trend of lending to those later in their lives. The property market is slowly changing to respond to this and as property solicitors we’ve been changing too. Those older first time buyers will be looking for support to navigate an unfamiliar process. In response to this we’ve developed a comprehensive website offering delivering information, online quotations for conveyancing and an online account facility so our clients can keep up to date with the progress of their case, ask questions, upload payments and so on. Recognising our older clients (as well as our younger ones) are busy people the account facility is also available in app form.

“The financial services industry and the regulators have a tough challenge on their hands developing the products and controls to meet the needs of these older homeowners as well as ensuring their customers are supported through their property purchase. The trend is clear – later life lending is here to stay.”

Content correct at time of publication