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Half of over 40s think they will still have a mortgage or rent during retirement
Half of people aged over 40 believe they will still be repaying their mortgage or paying rent when they retire, new research has found. The figures from a study by specialist insurer Partnership shows that while people aspire to owning their own home, a significant amount will still be making mortgage repayments when they retire. Some 31% think they will still have a mortgage and 20% will be paying rent when they retire. In addition, with 35% of households in England living in social or private rental accommodation, a number of retirees will need to meet these costs in later life. As people age and either purchase property or repay their mortgage this changes the number who expect to be meeting these costs in retirement but 18% of 66 to 70 year olds still expect to need to make rental payments and 15% expect to be repaying their mortgage. A breakdown of the figures show that of those aged 40 to 50 42% expect to still be paying rent and 26% a mortgage. In the 51 to 55 age group 37% expect to be paying rent and 18% a mortgage while in the 56 to 60 aged group some 22% expect to pay rent and 15% a mortgage. In the 61 to 65 age group 21% say they are still paying rent and 16% a mortgage while in the 66 to 70 age group it is 18% and 15% respectively. In addition to meeting housing costs, these retirees are also likely to be put under financial pressure as they look to meet costs such as council tax, utilities and upkeep of their property. ‘Most people aim to own their own home by the time they retire but the trend towards remortgaging, purchasing later in life and being kept off the housing ladder by high house prices means that this is out of reach for almost a third of people,’ said Mark Stopard, head of product development at Partnership. ‘This may see some people taking advantage of the opportunity to work longer but for some people, especially those with health issues, this is simply not an option. While those in private or social rental accommodation need to focus on securing sufficient income to meet these costs, those who are still repaying their mortgage have more options,’ he explained. ‘Either they can use part or all of their pension to repay the borrowing, although this is likely to significantly impact on their later life income, or they can use equity release which can mean they will leave less to their families but face less financial pressure,’ he added. ‘When people consider their retirement, it is vital that they look to reduce their mortgage borrowing as much as possible. No one wants to worry about cutting back on essentials such as food and heating to meet housing costs when they should be enjoying retirement,’ he concluded. Continue reading
Review of UK housing and planning policies widely welcomed
Changes need to be made to housing and planning policies in the UK to ensure enough new homes are being built, according to a property market review. The Lyons Housing Review, commissioned by the Labour party, identifies the changes which need to be made to increase the number of new homes to 200,000 a year. It says there must be new powers for local communities to build homes in places people want to live, that councils must produce a home building plan and allocate sufficient land for development and first time buyers should get priority access to new homes. The review says local communities should have the power to build the homes in places people want to live. Councils will be able to designate ‘housing growth areas’ and will have powers to assemble land and give certainty that building will take place. They will also ensure on larger developments the planning gain that results will in part be used to invest in the schools, roads, green spaces and GP surgeries that make developments possible. It also says councils should be compelled to produce a home building plan and allocate sufficient land for development. Labour says if it wins the general election next year it will make it mandatory for local authorities to produce a local plan to meet the housing needs of the community. If they do not allocate sufficient land or present a plan, the planning inspectorate will have powers to step-in to ensure the housing need is not ignored. The third main recommendation is that first time buyers from an area should get priority access to new homes. Councils would be given the power to reserve a proportion of homes built in ‘housing growth areas’ for first time buyers from the area for a period of two months. In addition, local authorities will be able to restrict the sale of homes in these areas so they cannot be sold for buy to let or buy to leave empty properties. The changes identified have been widely welcomed. According to Susan Emmett, residential research director of Savills the recommendations should help boost housing numbers regardless of who is in government next year. ‘The report clearly recognises the need for a long term, more strategic approach to planning for homes, integrating housing with infrastructure and increasing the number of players operating in the market,’ she said. ‘While we expect that large house builders will continue to provide the bulk of new homes, Lyons’ recommendations for supporting smaller builders and helping Local Authorities to build more is crucial if we are to increase overall housing numbers,’ she explained. ‘We also welcome the report’s recognition that we need to be delivering homes across all tenures including homes for rent. We expect to see the number of people renting continue to grow and supporting institutional investors to build to rent is essential to provide the good quality homes needed,’ she added. The British… Continue reading
Average house prices in the UK fell by 1.1% last month, the latest data shows
Average house prices in the UK fell 1.1% in September but are still up 6.9% on an annual basis, according to the latest index figures to be published. During the month average house price stabilised at £203,135, but in London property prices fell 3.3% but are still up 19.8% year in year taking the average price in the capital to £507,967. The National Housing Market Monitor report from haart estate agents says that the market remains strong with almost 10 buyers chasing each new property instruction across the UK, up from eight two years ago. In London there are 16 potential buyers chasing each property instruction. The difference between the London market and the UK as a whole is also marked with it comes to new properties being put up for sale. They have increased annually across the UK by 2.8% but in London by 23.1%. The report from the independent agent which has a network of 200 branches across the country, also shows that the average property price for first time buyers has reached two year high at £160,218, up 4.1% on a monthly basis and 8.2% annually. ‘Although our data shows a small slowdown in house price growth on a monthly basis, this must be taken in the wider market context. Good mortgage deals are still very much on the table and interest rates aren’t going up for the foreseeable future,’ said Paul Smith, chief executive officer of haart. ‘We have 10 buyers chasing every new property instruction UK wide so sellers shouldn’t be concerned. They should be reassured that the UK property market is still performing well,’ he added. New properties for sale across the UK in September increased 2.8% annually but fell on the month. This is the fourth consecutive month in which property supply has increased on an annual basis. In contrast the number of new buyers is down 6.6% annually, again the fourth consecutive month in which the level of demand has fallen on an annual basis. Similar to new buyer registrations, the number of first time buyer registrations decreased 6.4% annually and 2.8% on the month. However first time buyers now make up a higher percentage of all mortgages written, 44.7% in September 2014, up from 41.1% last year. The average mortgage achieved by first time buyers is also up and now stands at £125,668, an increase of 11.1% annually and 3.9% on the month. Continue reading
