"It is only in the last year or so that lenders have really started to look at their maximum age limits for mortgages and I find this astonishing."
From the well-established institutions of the high street to the more bespoke lenders and the intermediary community, as an industry we have a lot to be proud of. However, there is one area in which I think the sector falls down. That is, it doesn’t recognise changes in society as quickly as it should do and as a result is sometimes quite dated in its approach. Lending to older borrowers is a case in point.
It is only in the last year or so that lenders have really started to look at their maximum age limits for mortgages and I find this astonishing. It’s been common knowledge for years that, as a society, we’re living longer. And it’s surely news to no one that borrowers are getting on to the housing ladder later in life and taking out longer mortgage terms in order to do so due to house prices and the large deposits required by many lenders. It’s unsurprising then that some borrowers will need to take their mortgages into retirement and others, fit and active at 65, might still be looking to buy property once their employment years are over.
So why has the market not responded to this? Why are we still seeing older borrowers struggling to get finance despite having an, albeit more complex, income through pensions and investments? Why is the lending industry still so set on black and white conditions?
Self-employed borrowers can certainly sympathise. According to the Office for National Statistics there are over 4.6 million people in the UK right now who are self-employed. Yet lenders still make anyone without standard, run of the mill employment jump through hoops to get a mortgage.
Don’t get me wrong. I understand where lenders are coming from. For the larger, high street lenders especially, it is in their nature to be risk averse and a borrower without a confirmed monthly income from an employer is obviously a more risky bet. Increased regulation has prompted lenders across the sector to be even more cautious in their approach but I fear some have gone too far. Indeed, even the regulator itself has said lenders should do more to help older borrowers.
There is certainly room for further discussion and debate in this area. Progress is being made but change is not happening fast enough.
