Equity Release

Age limits under review by building societies

Christina Hoghton
Written By:
Christina Hoghton

Funding mortgage borrowing into retirement is becoming more important, and ever more necessary

As the UK’s population ages, the issue of mortgage lending beyond retirement age has come to the fore. And now the building society sector has pledged to review the maximum age limits on mortgages as one way to better support those needing mortgage finance later in life.

Older borrowers can be restricted by such limits,  although research from the Building Societies Association shows that around half of 25-34 year olds think they will need a mortgage that lasts into retirement.

Reviewing maximum age limits on mortgages is the first of nine recommendations contained in a report entitled Lending into Retirement from the BSA. The report highlights a major societal shift as our population ages and increasingly needs to fund mortgage borrowing into retirement.

The UK already has 11.6m people over the age of 65. By 2034 it is estimated that around a quarter of the population will be over 65 .

BSA head of mortgage policy, Paul Broadhead said:

“As the average age of a first-time buyer continues to increase, borrowing into retirement is becoming increasingly commonplace, rather than a niche form of lending. This report identifies a number of areas that need further attention if we are going to meet the inevitable growth in demand for borrowing into, and in, retirement.

“The time is right to review lending policies, examine how advice is provided and to work closely with a range of organisations across different sectors to ensure that lenders are equipped with the appropriate tools to respond to the rapidly changing demographics across the UK.”

The remaining recommendations cover a range of areas, from the availability of suitable housing options for older homeowners, to working towards a mortgage which adapts to the different stages of a person’s life.