This is one of nine recommendations contained in an interim report entitled Lending into Retirement, from the Building Societies Association (BSA) which points out that the UK already has 11.6 million people over the age of 65.
Property Wire reports that by 2034 it is estimated that around a quarter of the population will be 65 plus and lifestyle changes, including divorce, mean that people are tending to buy later and go for longer repayment terms.
BSA research shows that around half of 25 to 34 year olds think they will need a mortgage that lasts into retirement and the average age of an unassisted first time buyer has already hit 31.
The report also calls for more availability of suitable housing options for older home owners who want to move to a property that meets their changing needs and better cross departmental co-ordination to rationalise Government policy on the treatment of older borrower’s housing wealth.
Other areas for improvement include make holistic financial planning in retirement available, the formation of a cross-industry alliance with other bodies focused on the needs of older consumers and the creation of a mortgage product that adapts to the different stages of a person’s life.
“We have been working together as a sector to look at this issue and we are making some early recommendations for change,” said BSA chairman Dick Jenkins.
“Some put the ball firmly in our court, others can only be delivered in partnership and a few may require regulatory change.”
He explained that the Financial Conduct Authority has been involved in preparatory work.
“We have also sought the views of many others and these will now contribute to the next stage of the project, to deliver progress for those who want, need and deserve to buy a home of their own into and in retirement,” he added.
According to BSA head of mortgage policy, Paul Broadhead, it is natural for the building society sector to kick-start and lead this work.
“We already tend to have a more flexible approach to lending with higher and sometimes no age limits and a willingness to assess applications considering an individual’s circumstances,” he said.
“As the average age of a first time buyer continues to increase, borrowing into retirement is becoming increasingly commonplace, rather than a niche form of lending.
“This report identifies a number of areas that need further attention if we are going to meet the inevitable growth in demand for borrowing into, and in, retirement.
“The time is right to review lending policies, examine how advice is provided and to work closely with a range of organisations across different sectors to ensure that lenders are equipped with the appropriate tools to respond to the rapidly changing demographics across the UK.”