The director of the International Longevity Centre-UK has called on Britain’s mortgage industry to do more for retirees who wish to take out loans for homes.
Talking at the conference organised by the Council of Mortgage Lenders, David Sinclair suggested that the industry should be wary of discriminating on the basis of age. In addition, Mr Sinclair appealed to older people to ensure that they are certain that buy-to-let is their preferred investment method.
Extension
Since the year 2010, the number and percentage of mortgages extending into retirement has risen. Research from the International Longevity Centre in 2014 showed that the average property wealth of retirees is £122,000, leading to an overall total of £1.4 trillion.[1]
Mr Sinclair feels that larger demographic trends, financial insecurity and a number of policy changes is meaning that a lot of people are needing to take their mortgage into retirement. He warns that property investment is a risk and does not guarantee a return.
‘The industry and the regulatory environment have been seemingly struggling to respond to ageing and demographic change. We are, however, very pleased to see that the industry have begun to respond to these challenges through the important work being led by the CML,’ Sinclair said in his conference address. [1]
Sinclair feels that, ‘we are living longer, our family structures are changing, we are marrying later and we are working longer. At the same time, financial insecurity will result in more people needing to borrow more and later in life.’ He also stated that, ‘we should be particularly worried about those retirees with interest only mortgages but no linked investment.’[1]
Freedoms
Continuing, Sinclair noted that the introduction of pension freedoms could give the buy to let sector a further boost. However, he believes that all older people should seek advice before signing any contract. He concedes that the release of equity is an attractive proposition for many looking to supplement their pension.
‘The industry needs to ensure that the income poor asset rich pensioners are well served by this market,’ Sinclair commented. ‘That said, the recent growth in the number of people aged 55 to 64 taking equity release is potentially very worrying,’ he added. [1]
[1] http://www.propertywire.com/news/europe/uk-property-older-buyers-2015061210622.html