Tag Archives: real estate
Younger UK home buyers think they will still have a mortgage into retirement
A new survey has found that around half of 25 to 34 year olds in the UK believe they may need a mortgage that lasts into retirement and are concerned they won’t be able to get one. Some 27% of people in this age group also think they may struggle getting a mortgage into retirement because their credit history, income level or age will count against them, the poll from the Building Societies Association says. ‘We are all now living much longer and getting on to the property ladder later in life. Many younger buyers are realising that they may not be able to pay off their mortgage until after they retire. As the average age of a first time buyer increases, borrowing into retirement is becoming the new normal, rather than a niche form of lending,’ said Paul Broadhead, head of mortgage policy at the BSA. He also pointed out that the Mortgage Market Review, introduced just over a year ago, has had an impact on borrowing. ‘The application process is much more rigorous and borrowers now have to contend with strict affordability assessments that factor in other commitments,’ he explained. ‘This means they may have to borrow over a longer term to secure a mortgage. These demographic and regulatory changes mean some borrowers may find their mortgage application is rejected if they need to borrow into their anticipated retirement. The mortgage market needs to change to cater for this shift in borrowing,’ he added. However, he also pointed out that despite the concern shown by younger home buyers, it isn’t all doom and gloom. ‘The building society sector tends to be more flexible and willing to offer mortgages that extend into retirement,’ said Broadhead. ‘ Some societies do not have upper age limits, tend to take the case by case approach to applications and are keen on developing long term products that cater to first time buyers who may want or need to borrow into older age. The sector is also keen to debunk the myth that once you are over 40 you are too old to get a mortgage,’ he added. ‘Given that the population is aging and house purchase later in life is more common, the Government, regulators and the financial services sector needs to cater for this change. Paying off a mortgage by the age of 65 is no longer a reality for many,’ he concluded. Continue reading
New report reveals housing issues in parts of the UK
Parts of the UK are facing major housing challenges that include not enough smaller homes for young people or those wishing to downsize, according to a new national report. Among the other issues identified are mortgage debt, the cost of looking after a property, rising rents, being unable to sell in the current market and a higher cost of living in rural areas. The report from national charity Citizens Advice says there needs to be a wider debate about the housing challenges in England and Wales and it is calling for a debate beyond getting people onto the property ladder. Particular problems mentioned include the fact that 1950s and 1960s new town planning decisions in places like Crawley has resulted in not enough small homes for young people or those wanting to downsize and home owners in County Durham struggling to keep up mortgage payments and meet the costs of looking after their home. Young seasonal workers in Blackpool are trapped renting in crumbling bed and breakfasts, whilst owners are unable to sell and people in Conwy, Enfield and Dorchester face spiralling private rents, up-front costs of moving and sub-standard homes rented out by private landlords. Also the growing student population in Exeter has had a major impact on the local infrastructure and people are being driven out of towns in Pembrokeshire by poor housing standards and antisocial behaviour, but struggling with the higher costs of rural living. ‘People's housing challenges vary by where they live. Across the country too many people are living in homes that don't meet their needs from private renters in a damp property or home owners who can't afford to move. Housing is one of the top issues people turn to us for help with, but within this we see a huge range of different problems,’ said Gillian Guy, chief executive of Citizens Advice. ‘We need a broad-ranging debate about the different housing challenges facing the nation, one that moves beyond just trying to get people onto the property ladder. The new Government has the opportunity now to look at housing problems in the round and consider how best address the range of challenges faced by renters and home owners alike,’ she added. Continue reading
UK home lending weaker than a year ago, latest data shows
Lending for homes in the UK in April was weaker compared to a year ago but remained steady month on month, according to the latest data from the Council of Mortgage Lenders. verall gross lending in April was £15.8 billion, down from £16.1 billion in March and £16.8 billion in April last year. First time buyers saw a decline in lending compared to March and April last year although loan sizes for this sector have increased since a year ago. The CML says that competitive mortgage rates mean first time buyers are paying less to service their mortgage than any time since it began tracking this in 2005. Home mover lending volumes went up slightly month on month but there was a decline compared to April last year. The average home mover loan size decreased in April compared to March, but increased compared to the same period last year. Home owner remortgage activity also declined compared to last year and on a month to month basis. It has remained relatively subdued since around 2009. Lending for buy to let in April saw a decline compared to March, but there was substantial growth compared to levels in April last year. The CML says this was largely due to the increased levels of remortgage activity in the buy to let sector seen since the beginning of the year. The composition of lending for buy to let is different compared to that of home owner lending. While over the past year about 30% of lending to home owners was for remortgage, in the buy to let market 52% of lending was for remortgage. ‘House purchase lending in April was relatively subdued compared to last year, but similar to activity in March,’ said Paul Smee, director general of the CML, ‘The economy is recovering, with employment up, earnings growing, and competitive mortgage rates, so we expect activity to continue building as the year progresses. Buy to let is showing stronger growth than home-owner lending, buoyed significantly by remortgaging, which continues to remain more subdued in the home owner market,’ he added. Continue reading
