Equity Release 

Estate agents warn on over-55s mortgage freeze

Estate agents warn on over-55s mortgage freeze

Estate agents are becoming increasingly concerned about mortgage lending restrictions on customers aged 55 plus.

Research conducted online by independent company Pollright among a sample of 104 estate agents in August 2016 showed 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 nearly six out of 10 believe the current range of mortgages does not meet the needs of over-55s and more than half (54 per cent) want to see more action to help older customers borrow.

But the study found just 41 per cent 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. 

Will Hale, director of Key Partnerships, which commissioned the survey, 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.”

But Dale Jannels, managing director of Atom, said the range of deals for those aged 55 plus is increasing. 

He said: “Very few high street lenders when writing to customers coming to the end of their term advise that mortgages are available post normal retirement age through other sources. 

“Very few suggest to clients to go and see a whole of market mortgage broker.  

“Brokers who have access to and deal with specialist lenders, mutuals and other smaller financial institutions know that there is no max age limit on an increasing number of deals, and as these are normal mortgages, the advisers don't need the Equity Release qualification to advise. 

“All angles need to be reviewed and compared when advising a client lending in to later life but I feel the larger issue is educating the customer to ensure they know all of these options are available to them in the first place.”