Speaking at the BSA Annual Lunch, BSA Chairman, Jonathan Westhoff, gave an update on sector action for older borrowers on the second anniversary of the first BSA report:
- Almost 60,000¹ mortgages were written in the first 6 months of 2017 which will mature when the borrower is 65 or older, a 45% increase on the same time in 2015.
- The number of new mortgages that will mature when the borrower is between 79 and 84 has risen 162%¹ between the first half of 2015² and the same time in 2017.
In addition, during the first half of 2017, 43%¹ of new mortgages from building societies had a term longer than 25 years. Many building societies (34) will now lend to borrowers who will be 80 years old or more at the end of their mortgage term, up from 18 in 2015.
Commenting, Jonathan Westhoff said:
“The peak of this demographic trend is yet to come. The traditional first time buyer market we recognise is steadily shifting up the age range, with first time borrowing stretching beyond 65. Others choose to borrow to help their family, secured on the equity it has been their good fortune to see grow. Recent recognition by the FCA of retirement interest-only mortgages was welcome. A number of societies offer these mortgages, giving older borrowers a useful alternative.”
On the wider housing crisis:
- A lack of housing supply remains the root cause of the crisis.
- Allowing Local Authorities more flexibility to build is essential and we hope to see this delivered in the Budget.
- It is time for a more nuanced debate on the use of Green Belt land for house building.
On Brexit, Jonathan Westhoff said: “Building societies are UK domestic players. We are staying right here and will continue to do what we do best in society – providing a home for savings and savings for a home.”
Notes to Editors
- ¹data from UK Finance Regulated Mortgage Survey
- ²195 mortgages in H1 2015 vs 511 in H1 2017
- The building society sector is growing sustainably with 23 million members (around a third of the UK population) accessing its products and services.
- In the first half of 2017, building societies approved c8,300 new mortgages each week.
- Building society savers were better off to the tune of £380m in interest over the first six months of the year
- 2017 Lending into retirement update leaflet can be viewed here.
- The full speech can be viewed here