Home Finance Huge spike in over-55s looking to buy their first home – but...

Huge spike in over-55s looking to buy their first home – but it comes with a warning


A recent surge in individuals in their 50s and 60s seeking to buy property has been reported by Legal & General Mortgage Services.

The company noted a 13 percent rise, in the first quarter of 2024, of potential homeowners aged 56-65 compared with the same period the previous year.

This data was obtained from Legal & General Mortgage Services’ Ignite platform that brokers utilise to source information regarding mortgage products.

Legal & General Mortgage Services disclosed that they’re involved in about one-fourth of all mortgages in the UK.

In addition, their data suggests that from April 2023 through April 2024, 38 percent of potential buyers were first-time purchasers, with an average age of 33.

A deeper study from Legal & General Ignite reveals that advisers for first-time buyers sought out loans worth £217,125 on average over the last year.

For these customers, the most searched-for mortgage terms were 31-35 years, then 26-30 and finally 36-40.

Kevin Roberts, Managing Director at Legal & General Mortgage Services, stated: “Our figures show that the desire to own a home remains strong, even for those who are waiting longer to take those first steps on to the property ladder.”

“As affordability begins to ease, we’ll likely see further activity in the first-time buyer market, especially if inflation continues to fall and the Bank of England reduces its base rate later in the year.”

“There are a number of factors likely to be impacting people’s decisions to buy a property. High rental prices may encourage some customers toward home ownership. Equally, as mortgage rates decreased at the start of the year, customers who had been waiting for the right time to buy may have found products which are more affordable.”

Earlier this week, Sir Steve Webb, a former pensions minister who is now a partner at LCP (Lane Clark & Peacock), warned that some home buyers could be jeopardising their retirement prospects by taking on ultra-long mortgages.

He obtained freedom of information (FOI) data supplied by the Bank of England, showing that 42 percent of new mortgages in the fourth quarter of 2023 or 91,394 had terms going beyond the state pension age.

Emily Shepperd, Financial Conduct Authority (FCA) chief operating officer, recently said in a speech: “Alongside longer terms we also see a greater proportion of mortgages projected to mature around state retirement age. The projected median age of a first-time buyer at maturity is now 65 years old, up from 56 in 2005.”

“The proportion of mortgage customers over 67 is currently less than two percent of all loans. By 2040 this rises to five percent, and by 2050 it is almost 10 percent.”

“Lending into retirement is moving from a niche to a norm.”

Extended mortgage terms can potentially make monthly repayments more manageable in the face of high property prices and increased mortgage rates, although it could lead to a higher total interest repayment.

On this topic, Karina Hutchins, UK Finance Principal for Mortgage Policy, has stated: “When reviewing new mortgage applications, lenders will act within the responsible lending rules set by the Financial Conduct Authority and carefully consider whether the borrower will be able to afford their mortgage in the future.”

“This will include whether the requested term would take the borrower beyond their anticipated retirement age.”

“Where this is the case, it is common practice for lenders to request proof of pension. Those closer to retirement, usually within 10 years, may need to satisfy their lender that they can afford the mortgage based on their retirement income.”

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