Despite more products being on offer the mortgage market in the UK still does not offer enough for people aged 55 and over, research suggests.
A survey found that estate agents are becoming increasingly concerned about mortgage lending restrictions for customers aged 55 and over and the impact on the wider housing market.
Some 58% of agents surveyed believe the current range of mortgages does not meet the needs of this age group and 54% want to see more action to help older customers borrow.
Around two out of five estate agents believe the problems faced by older borrowers are having a knock-on effect in the housing market as a whole, according to the survey by equity release referral service Key Partnerships.
It also found that 41% of estate agents are aware that equity release plans, which enable home owners in this age group to access existing property wealth, can be used for house purchases.
The research shows 33% of estate agents are regularly asked for information and guidance about equity release and 63% want to learn more about using equity release for house purchases.
The firm says that older home owners typically face shortfalls when looking for their perfect last move due the premium prices that many properties for older buyers, for example bungalows, attract. Whilst they may not need a significant mortgage many are excluded by harsher lending criteria but are unaware that equity release could provide the solution.
It believes that equity release solutions can be used in conjunction with a house purchase just like any other type of mortgage with the funds released on the day of completion to bridge the purchase gap.
Many also have the option to borrow additional funds which can be useful in assisting with the costs of turning their new house into their dream home and/or keeping a drawdown facility available which may prove invaluable in the future if home adaptions are required to make the property suitable for later life living.
‘The mortgage market is working to make it easier for the over 55s to borrow with regulators and lenders recognising there is an issue which needs to be addressed. However the fact remains that the experience on the ground is that it is still a major problem and the views of estate agents highlight how making it difficult for over 55s to borrow has a chilling effect on the housing market as a whole,’ said Will Hale, director at Key Partnerships.
‘Estate agents need to focus on solutions when assisting clients and it is clear that older customers would benefit from a wider range of options than offered in the mortgage market. Estate agents who can discuss equity release as a potential alternative are able to benefit from an additional revenue stream by way of a referral commission by introducing potential clients to a specialist adviser as well as secure an otherwise lost house sale,’ he pointed out.
‘Equity release is not readily seen as a solution for home purchase but rather a solution for those staying in their home. Equity release should be seen as an essential part of the home buying options available to older borrowers,’ he added.
