"I think a lifetime mortgage will be used to filter wealth down where people say ‘I’ve got a bit tied up in my house let me see if I can help my kids and my grandkids’. That’s my prediction."
This is according to a panel of industry experts on the latest Mortgage Market Alliance podcast.
Talking on the podcast, Tom Webster, partner at Sentry Advice, said: “Lifetime mortgages are not bound by employment or consumer debt and the sort of things we’d expect in the normal mortgage world. The only thing that could affect them is house prices and house prices obviously could decline. But we are seeing families wanting to help out and this has always been a staple of lifetime mortgages – the passing down from generation to generation and early inheritance and I think we are probably going to start to see more of this creep in over the next couple of months where people might have got themselves into a bit of trouble maybe because they can’t work or have lost their job. I think a lifetime mortgage will be used to filter wealth down where people say ‘I’ve got a bit tied up in my house let me see if I can help my kids and my grandkids’. That’s my prediction.”
Stuart Wilson, CEO at AiR Group, agreed, saying: “I’d recommend a lot of advisers to look at the FCA paper that came out a couple of days ago to look back on as it’s more relevant than it has ever been. Because the age profile on our customers will change. I can predict quite comfortably that we will see a four to five year drop in the average age in the next six to 12 months. As Tom mentioned, we are going to see people who were maybe post retirement, taking early retirement and setting up small businesses. A lot of those were in the hospitality industry and might suffer disproportionately. People looking for funds to see them through that business crisis and looking to the bank of mum and dad – all of those things are already starting to be reflected.”
Chris Brown, head of lifetime mortgage distribution at One Family, confirmed that later life lenders are already seeing growing demand, saying: “We’re seeing a good surge in enquiries”.
Richard Groom, head of mortgage sales at Tipton & Coseley Building Society, added: “I share everybody’s optimism moving forward about the demand and the new requirement for later life customers to perhaps think quicker about sharing money down to family members who are probably experiencing more difficulties.”
The full episode is available now and can be found at: https://www.mortgagealliance.org.uk/news.