Mortgages 

Lender reports younger mortgage borrowers

Lender reports younger mortgage borrowers

Most of Clydesdale and Yorkshire Bank’s new mortgage applicants are younger than in previous years, data released by the lender has shown.

Of the 35,000 mortgage applications received by Clydesdale and Yorkshire in the past 12 months, the age bracket featuring most frequently was 36-40, making up 17 per cent of applicants - compared with 16 per cent in the 41-45 bracket and 14 per cent aged 45-50 years old.

In comparison, the age group represented most frequently five years ago was 41-45, which suggested borrowers getting on the property ladder were becoming younger.

The lender's data, collected between August 2017 and July 2018, also found a third of their first-time buyer applicants were in the 26-30 age bracket and more than a fifth were aged 21-25 years old.

Caroline Graham, head of mortgages at Clydesdale and Yorkshire Banks, said the change in demographic can be attributed to the rise in rental prices and the recent low interest rate environment.

She said: "The financial issues with renting have been well documented and so people are being urged to save for a deposit in order get onto the property ladder as early as possible.

"We have also been in a prolonged environment of historically low interest rates and even as the base rate starts to rise many monthly mortgage repayments cost less than rent so consumers are better off."

Ms Graham said research conducted by the lender’s digital banking service earlier this year found 75 per cent of the UK population were worried about money - a figure she largely attributed to the cost of renting a property.

She said: "With high rental costs causing financial strain to many, it’s positive to see the age of customers applying for a mortgage is decreasing.

"If all of us can build a better relationship with money and take advantage of the best market rates for mortgages, then as a country we can become much more financially fit."

Daniel Bailey, principal at Middleton Finance, said he had arranged first-time buyer mortgages for more clients in their mid- to late-20s this year.

He said: "This could be a combination of low mortgage rates, certain parts of the country are easier to get on the ladder and the perception that renting is expensive.

"In the vast majority of mortgages I have arranged, my clients have had help with their deposit from parents or grandparents."

rachel.addison@ft.com