Rise in over-50s divorce driving mortgage advice surge
Splitting assets on divorce is challenging enough but for the over-50s there is the additional pressure of having to fund a new home when mortgage lenders are reluctant to help older borrowers.
Rising divorce rates among over-50s are piling pressure on law firms to provide advice on mortgage and property finance they do not feel qualified to provide, according to Key Partnerships research.
35% of law firms fear advice they offer on property finance and mortgages goes beyond their core expertise leaving them concerned about potential regulatory issues.
Around 44% of law firms report a rise in demand for advice on buying homes after divorce. Two-thirds believe equity release loans enabling clients to access property wealth could help but say it is only suggested as a solution in a third of cases they deal with.
Recent Government data shows that over-50s are the only age group to see a rise in divorce rates over the past 10 years despite total numbers of divorces falling. Analysis shows nearly 32,000 over-55s are divorced each year – across the UK the total number of divorces is 126,700.
Key’s research shows 70% of law firms refer clients asking about mortgages to specific advisers while 11% have a panel of mortgage providers they work with. However 78% of firms questioned said their business would benefit from a stronger relationship with equity release advisers.
Will Hale, director at Key Partnerships, said: “Splitting assets on divorce is challenging enough but for the over-50s there is the additional pressure of having to fund a new home when mortgage lenders are reluctant to help older borrowers.
“There is a growing demand for solutions which enable clients to buy a new home after divorce and law firms are coming under pressure to provide advice on an area that is not necessarily their core expertise.
“Equity release enables one partner to remain in the home while allowing property wealth to be shared and is a growing alternative for settling property issues at divorce. Equity release can also be used to boost funds available for a new purchase by releasing money on the new home.”