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

Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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