Mortgage service providers have recorded a surge in people in their 50s and 60s looking to get on the property ladder.
According to Legal & General Mortgage Services, the number of people ages 56 to 65 seeking homeownership increased 13% in the first quarter of 2024 compared to the same period last year.
The data comes from Legal & General Mortgage Services' Ignite platform, which brokers use to provide mortgage product information.
Legal & General Mortgage Services said it was involved in one in four mortgages in the UK.
The data also shows that 38% of potential buyers in the UK between April 2023 and April 2024 were first-time buyers, with an average age of 33.
Further analysis by Legal & General Ignite found that the average loan value retrieved by advisers on behalf of first-time buyers over the past year was £217,125.
The most common mortgage term searched by advisors on behalf of first-time buyers was 31 to 35 years, followed by 26 to 30 years and 36 to 40 years.
Kevin Roberts, managing director at Legal & General Mortgage Services, said: “Our figures show that the desire to own a home remains strong, even for those waiting longer to get on the property ladder. shows that
“As affordability begins to ease, we will likely see additional activity in the first-time buyer market, particularly if inflation continues to fall and the Bank of England cuts interest rates later in the year.
“There are a number of factors that can influence people’s decisions to buy property. High rental prices may encourage homeownership for some customers. Likewise, with mortgage rates falling since the beginning of the year, customers who were waiting for the right time to buy may have looked for more affordable products.”
Earlier this week, Sir Steve Webb, a former pensions secretary and now a partner at Lane Clark & Peacock (LCP), warned that some homebuyers may be gambling with their retirement prospects by taking on ultra-long-term mortgages.
He obtained Freedom of Information (FOI) data provided by the Bank of England, which shows that 42% of new mortgages in the fourth quarter of 2023, or 91,394, were for people over state pension age.
Emily Shepperd, Chief Operating Officer of the Financial Conduct Authority (FCA), said in a recent speech: The expected average age of first-time buyers at maturity has increased from 56 in 2005 to 65 today.
“The proportion of mortgage customers over 67 years old currently accounts for less than 2% of all loans. By 2040, this proportion will increase to 5%, and by 2050 it will reach almost 10%.
“Retirement lending is moving from a niche market to a mainstream market.”
Longer mortgage terms may result in cheaper monthly payments due to higher home prices and higher mortgage rates, but homeowners may end up paying more in interest over the long term.
Karina Hutchins, finance director for UK mortgage policy, previously said: “When considering new mortgage applications, lenders act in accordance with responsible lending rules set out by the Financial Conduct Authority and carefully consider whether the borrower can afford the mortgage for the period in question. future.
“This includes whether the requested period will extend beyond the borrower’s expected retirement age.
“In these cases, it is common practice for lenders to ask for proof of pension. People approaching retirement, typically within 10 years, may need to convince their lenders that they can afford a mortgage based on their retirement income.”