Mortgage lending seniors can give impetus to the real estate market of England

Population ageing is the most important problem which is relevant for all developed countries and Britain is no exception. According to information presented at the annual conference of mortgage lenders, the payment of about one-third of mortgage loan for the purchase of property in the UK will account for the post – retirement age of 65 and the proportion of such loans will continue to grow.

Now for people aged 55 to 69 years the hotel’s traditional mortgage products, while for people over the age of 70 years developed a special mortgage product.

Loans for senior citizens presents significant challenges for many UK banks. Banks like to have extra insurance and government guarantees to issue such loans. Uncertainty for the banks is enhanced by the fact that under discussion is the pension reform that creates additional risks for banks when lending to senior citizens.

The market of real estate in the UK is now influenced by two main factors – political instability in connection with Brexit and the imbalance of supply and demand of the housing market. The solution of the second problem can be alleviated if you ensure the flow of resale properties from older buyers.

However, for this purpose, the government together with the banks should develop new lending rules for senior citizens who, on the one hand, would provide certainty to banks, and on the other hand would be a stimulus for the development of the mortgage market of the elderly.

The government plans to give the market for about 1 million housing units by 2020. but the pace of construction is far behind scheduled and loans for senior citizens could be become a strong impetus to the housing market.

® Alice Morgan. 18.11.2016 G.

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