Over 55s mortgage freeze worries estate agents

Over 55s mortgage freeze worries estate agents
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.

New independent research from Key Partnerships has shown that estate agents are becoming increasingly concerned about mortgage lending restrictions on over-55s customers and the impact on the wider housing market.

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, the nationwide survey of estate agents found.

According to the report, 58% believe the current range of mortgages does not meet the needs of over-55s and more than half (54%) want to see more action to help older customers borrow.

But the study found just 41% of estate agents are aware that equity release plans,  which enable over-55 homeowners to access existing property wealth, can be used for house purchases.  

Key’s research shows around 63% of estate agents want to learn more about using equity release for house purchases while around a third (33%) are regularly asked for information and guidance on equity release.

Older homeowners 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.

With no affordability criteria equity release solutions can be utilised 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.


Will Hale, director at Key Partnerships, said: “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.

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.

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."

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Latest Comments

SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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Bertrand
Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy
Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

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CommercialTrust
CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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