The Bigger Issue

With 12.5% of homeowners betwe

mortgage should lenders impose a

Each month Mortgage Introducer takes a look at the bigger issues. This

This is a tough one to answer. Looking back though two things

last month got me thinking about our national obsession to own property and borrow money against the security. I hit the big 50 and for the first time research in Saturday Telegraph was relevant to me. Findings from the recent retirement survey carried out in February by Aviva suggests that 12.5% of 65-74 year olds still have a mortgage and I wondered if by the time I retired whether I would be in that camp. The answer is possibly yes as I fall into a fast changing demographic group who are both living longer and expecting a greater quality of life. Many of us are now having children later – 40 is the new 30, or in my case 50 is the new 40, meaning our attitude to the housing ladder have changed, indeed the good old “down-sizing” option at the end of the mortgage term is not necessarily available. The breakdown of relationships later in life when the

children have fled the nest will have seen the formation of new relationships and possibly a new mortgage to boot. The flexible approach to underwriting that we have seen during the late 90’s and early 00 ‘s has allowed these mortgages to be written well beyond retirement.

I suspect that the appetite for “interest only” mortgages that have never been converted especially in areas such as the South East, which when combined with recent turbulence on stock markets, has contributed to the number of mortgages still outstanding after retirement. There is also the growing trend especially more recently for

parents to help their siblings to get onto the housing ladder. Research suggests that the average age of a first time buyer who has bought a house without the help of parents is now almost 37 years old emphasising the ongoing financial impact of siblings well beyond what used to be called the “empty nester” life stage. Deposits of 25% or more have been required to get the best deals and these deposits are being raised on the parent’s or grandparent’s property – the impact of the credit crunch on the equity release market will certainly put more pressure on relatives to divert money from repaying debt to supplying deposits.

David Copland,

managing director, Pink Home Loans

Young at heart and carefree at 65! The former part is more

evident than ever but alas the latter part maybe not so as the cost of living into old age does not diminish that greatly, particularly if you still have a mortgage or other debt to service. The traditional norm of retirement at 65 is in reality more of an ideal than certainty these days and as unpalatable as it maybe for some, it is more likely that retirement will coincide with the biblical three score years and ten. It has always seemed to me a little absurd that here you are working eight days a week and on the turn of an event; your 65th birthday you were and are potentially consigned to the scrapheap of has-beens, unless you had planned some time in advance your strategy to fill those beckoning endless days. What a waste of experience! Naturally, for those who are self- employed it is an entirely different matter altogether. So given it is now a generally recognised fact that state

retirement age is increasing and due to the diminution of the strength of our pensions industry and infrastructure, it is inevitable more people will look to work beyond 65 either part-time or full time to supplement their income. Then there is the impact of European legislation and here employers need to recognise their obligations and become more innovative, and dare I say lateral thinking, in the opportunities a flexible, experienced and skilled work-force could present. Where that leaves us is a very interesting conundrum. We have an ageing population reliant on a diminishing pool of support but which is a vital and vibrant segment of society with a tremendous untapped asset base in more than just property wealth and who could, and should, continue to make a positive contribution. So, other than the equity release style of lender, why is

there such an antipathy towards supporting this area of the populous – just because you are 65 does not mean you become an alien! That said traditional lenders, who have stuck to their values of mutuality, still have an ability to think outside the box - albeit unfairly constrained on occasions by the dictates and pressures of regulation.

Dale Jannels,

sales and marketing director, AToM

Our experts have had their say, now it’s your turn to have yours. Visit www.mortgageintroducer.com and vote for the expert you think makes most

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