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Comment: Thank goodness for later-life lending


The improvement in later-life lending is important because many would-be downsizers struggle to find suitable housing

It is encouraging to see later-life lending gaining traction, with some interesting products coming out.

Lenders have realised people aged 55 and over are a good target market: they have a record to demonstrate spending habits, are likely to fit criteria and usually have a good credit history.

Reasons for borrowing in retirement can vary. People may want to make home improvements or help children get on the property ladder. Others may want to supplement their income to maintain their lifestyle, or provide a solution where an interest-only mortgage is maturing.

Some lenders work on earned income to an average maximum age of 70 to 75, based on employment plausibility, while others go even higher to, say, 95 years old.

Criteria vary and lending decisions can be based on a number of key factors, including retirement income, maximum loan-to-value, maximum loan size and the client’s age at entry or at the end of the term.

The improvement in this area is important. Despite suggestions that people should downsize once children have flown the nest, to free up family homes for others, it is not that easy. There is very little suitable housing for an ageing population that is living longer.

People are not ready to downsize to a small two-bed flat or bungalow; they want something they can enjoy, something new, perhaps with a small landscaped garden that is easy to maintain and with space to entertain family and friends. Affluent would-be downsizers have to stay where they are because there is nothing suitable to maintain their lifestyle.

Later-life lending enables them to do that in their existing home but, if developers were to consider the kinds of property these downsizers really wanted and needed, they might start to complete the picture.

Sally Laker is managing director of Mortgage Intelligence



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  • Carl McGovern 28th June 2017 at 7:23 am

    Not too many years ago, it was almost impossible to place a Mortgage for someone in their seventies and those types of borrowers, were forced down the Lifetime Mortgage route. Thankfully there are options available now and these seem to be expanding pretty rapidly. As Sally points out in her article, this is a good target market. I have often championed that a retired person with a decent pension, should be able to borrow at sensible limits and a term and age restriction, should not be placed on these cases. At the moment, the smaller lenders seem to have the more flexible approach, but hopefully the bigger lenders will start to realise that this is indeed a good market.