Rising House Prices See Borrowers Paying Mortgages Off Beyond Retirement

A significant number of borrowers are attempting to stretch mortgage terms to 35 or even forty years, with ‘maximum age at end of term’ the most-searched term by brokers in August. This backs up research which showed a 70% rise in 35 year-plus mortgages over the past two years. This trend for elongated mortgages is potentially a result of rapidly increasing house prices. With higher prices creating affordability issues, some borrowers are looking to spread their mortgage out over a longer time period to lower the monthly repayments. ‘Income multiple used for affordability assessment’, was the second most-searched term in the residential market in August. Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/finance/rising-house-prices-see-growing-number-of-borrowers-paying-mortgages-off-beyond-retirement.html 

Hundreds Of Thousands To Face Homelessness In Retirement Without Social Housing Boost

Hundreds of thousands of people could be facing homelessness in their retirement in the coming decades due to the rising costs of renting in the UK and the lack of affordable housing, a new report has revealed. A report carried out for the All-Party Parliamentary Group (APPG) on Housing and Care for Older People found that the rise in unaffordable rents for older people could cause a surge in pension poverty over the next 20 years. Download the report from the APPG website.

https://omghcontent.affino.com/AcuCustom/Sitename/DAM/124/All_Parliamentary_Report.pdf

Retirement Interest-Only Mortgages Offer Lifeline To Older Borrowers

A new breed of interest-only mortgage for older people is starting to take off. These deals could throw a lifeline to thousands of people who have an interest-only home loan that’s coming to an end, but don’t know how they are going to pay back what they owe. Interest-only mortgages became virtually extinct following the credit crunch. During the past few years some older homeowners with these mortgages have found themselves staring down the barrel of a big shortfall and worried they could lose their homes. The Financial Conduct Authority last year gave the green light to a new type of interest-only deal known as “retirement interest-only” mortgages and are a little more pricey than standard home loans. Read more on the Guardian website.

https://www.theguardian.com/money/2019/mar/23/retirement-interest-only-mortgages-offer-lifeline-to-older-borrowers

Report Calls For Improvements In Housing For Older People

A new Policy Exchange report reveals recommendations on improving the housing market for an ageing population. With housing continuing to race up the political agenda, a focus on young people’s experience of the housing market is often overlooked, the report finds. Compared to that of 11.9 million in 2016, projected numbers of 17.7 million living aged 65 and over will be seeking greater housing demands from the government, with a focus on providing better quality homes to improve people’s quality of life. The report further states that retirement housing needs to be a more desirable option and private providers should acknowledge the gap in the market for attractive retirement living. Download the report, Building for the Baby Boomers, from the Policy Exchange website.

https://policyexchange.org.uk/publication/building-for-the-baby-boomers/

What The Future Holds For Older Renters

Most debates around housing focus on young adults, the drastic fall in their rate of home ownership and ways to boost the number of first time buyers. Far less attention, however, is given to the vast numbers of renters who are already too old to get a mortgage and face a lifetime of renting instead. As more of them reach retirement age, the state will start paying more of their rent, and faces enormous costs unless it makes some fundamental changes to the housing market. Using the English Housing Survey, we have projected that by 2035 nearly 1 million households of retirement age will be renting from a private landlord. Currently the figure is 370,000. Download Life in the Rental Market from the Generation Rent website.

Housing Wealth Will Be Crucial In Plugging The Pensions Gap

The UK is sleepwalking into a retirement income crisis that cannot be averted by pensions alone. The shift towards defined contribution schemes means millions of workers will run out of money in retirement. Those contributing eight per cent into defined contribution schemes throughout their working life will end up with just one fifth of the pension of an identical worker in a defined benefit scheme. While this would lead to an average worker accumulating a pot of £380,000 by the time they reach retirement, this only buys an annuity of £12,000 a year at current rates. What’s more alarming is that most defined contribution savers have not saved enough to even achieve this amount. Read more on the City AM website.

Under-35s Put Saving For A Home Ahead Of Saving For Retirement

Almost a quarter of under-35s are more concerned with putting money aside for a deposit to buy a home rather than pay it into a pension pot. Nottingham Building Society (NBS) said that 24% of this age group was more focused on saving for a home than saving for retirement, with only 8% targeting pensions. Research shows that 34% of under-35s are either saving for the first home or to move home, compared with 18% of the population as a whole. Retirement saving is the main saving and investing priority for the population as a whole with 24% selecting it ahead of 23% who say having cash for unexpected bills is their main priority. But it only becomes the major priority when people reach the age of 45. Read more on the Housing Excellence website.

Number Of Retired Renters Soars By More Than 200,000 In 4 Years

The number of people living in private rented accommodation in retirement has soared by more than 200,000 in the last four years, according to a poll of private renters.  Overall, the poll shows that the proportion of retired private renters has grown by 13 per cent since 2012 as more and more people turn to the private rented sector. However, the proportion of landlords who let to retired renters has almost halved during the same timeframe, with nine per cent of landlords saying they currently let to retirees compared to 19 per cent in 2012. Read more on the NLA website.