BSA probes viability of intergenerational mortgages

Houses, house, property, monopolyThe Building Societies Association has commissioned a new study to look at the viability of intergenerational mortgages.

This review will be overseen by former Council of Mortgage Lenders economist and housing expert Bob Pannell, and the former chief executive of the Bath Building Society Dick Jenkins.

The study will look at new ways that building societies can help the older generation support and broaden housing choices for the young.

Details of this new study were unveiled at the BSA’s annual conference in Manchester.

Commenting on the launch of this study, BSA chief executive Robin Fieth pointed out that societal changes mean that mortgage lending needs to develop.

Problems are being fuelled by an ageing population and a shortage of housing supply. As a result the average age of a first-time buyer has risen from 30 to 33 over the past decade.

Meanwhile he says the number of people in the 20s accessing mortgage finance is forecast to halve by 2030.

Fieth says: “Inequality between the generations is a growing challenge in our society. I asked the BSA team what it might take to bring the average age of a first-time buyer down and importantly what we as a sector might do to contribute directly.”

He says than Pannell and Jenkins will explore ways that building societies might offer financial options to help older homeowners support younger borrowers.

Building societies currently hold around 22 per cent of all mortgage balances in a £1.4tn market.

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