Nigel Waterson, chairman of the ERC, said the reluctance of mainstream lenders to allow borrowers to extend their mortgage term into retirement has been heightened by the Mortgage Market Review and needs to be addressed.
“Supporting the UK’s ageing population requires a joined up approach to address low retirement incomes and lingering interest-only mortgage debt, to name just two of the looming challenges,” Waterson said.
Just over 80% of properties, which are owned outright fall within the 55-64 age bracket, the majority of which have a net property wealth in excess of £125,000 which could be used to support retirement income.
Waterson said getting mainstream mortgage lenders to consider an equity release solution for their customers would require a ‘major cultural shift’ which was important to bring about without compromising consumer protections.
Director-general of the CML Paul Smee announced his intentions to work towards building a ‘better relationship’ between the two markets at the Legal & General Housing Matters debate at the start of the month.
Smee said he did not believe that the residential mortgage market and the equity release market understood each other very well.
But the retirement issue has begun to creep up the agenda of some mortgage lenders.
In April, the Buckinghamshire Building Society launched its Retirement Planning mortgage whic has no upper age limit and buy-to-let lender The Mortgage Works removed its maturity age limit.
At the debate senior figures from Legal & General called on the government to relinquish its neutral stance on equity release and begin ‘actively endorsing its benefits’ to help it become mainstream.
