Last time buyers stuck in unsuitable properties or relying on the Bank of Son or Daughter
Current pressures in the housing market are being affected by two trends impacting on older homeowners. On the one hand there are literally millions of over-55s who are ‘stuck’ in unsuitable homes due to a shortage of attractive retirement housing whilst on the other hand there are growing numbers of older borrowers refused a mortgage who are looking for help from the ‘bank of son or daughter’.
Recently reported research notes that the ‘last time buyer’ (LTBs) market comprises some 5.3m under-occupied homes in the UK with 3.3m LTBs wanting to downsize. Housing market commentators are currently arguing that the provision of more suitable housing for this group could hold the key to solving the housing crisis, estimating that if all those LTBs were able to move it would free up 2.6m family homes and 7.7m unused bedrooms. The research shows that only 7 percent of LTBs have moved in the last five years and this is attributed to a lack of ‘good value, purpose built housing’.
Older borrowers wanting to move may face an uphill struggle to secure a mortgage and increasingly those who do move have to ask their children to be guarantors after failing the lending rules when they try to remortgage.
Lynne McCaffrey, Head of Property comments:
“Older borrowers looking to make a property purchase are faced with two challenges – firstly finding a suitable property which meets their needs and then secondly finding a remortgage. However, the pressures in the current property market would be alleviated if more of the older borrowers thinking of selling a property and downsizing were able to do so.
“I’m sure that in the coming months we’ll see more comment about these two related matters and may be some developments in both financial services and property development to address these issues.”
Content correct at time of publication