More older buyers looking to get on housing ladder, figures show

A jump in people aged in their 50s and 60s who are looking to get on to the property ladder has been recorded by a mortgage services provider.

Legal & General Mortgage Services said that in the first quarter of 2024, there was a 13% increase in people aged 56 to 65 looking to move into home ownership, compared with the same period last year.

The data was taken from Legal & General Mortgage Services’ Ignite platform, which is used by brokers to source mortgage product information.

Legal & General Mortgage Services said it is involved in around one in four mortgages in the UK.

Its data also indicates that between April 2023 and April 2024, 38% of potential buyers in the UK were first-time buyers, with an average age of 33.

Further analysis from Legal & General Ignite found the average loan value searched for by advisers on behalf of first-time buyers over the past year was £217,125.

The most common mortgage term searched for by advisers on behalf of first-time buyers was 31 to 35 years, followed by 26 to 30 years and then 36 to 40 years.

Kevin Roberts, managing director, Legal & General Mortgage Services, said: “Our figures show that the desire to own a home remains strong, even for those who are waiting longer to take those first steps on to the property ladder.

“As affordability begins to ease, we’ll likely see further activity in the first-time buyer market, especially if inflation continues to fall and the Bank of England reduces its base rate later in the year.

“There are a number of factors likely to be impacting people’s decisions to buy a property. High rental prices may encourage some customers toward home ownership. Equally, as mortgage rates decreased at the start of the year, customers who had been waiting for the right time to buy may have found products which are more affordable.”

Earlier this week, Sir Steve Webb, a former pensions minister who is now a partner at LCP (Lane Clark & Peacock), cautioned that some home buyers could be gambling with their retirement prospects by taking on ultra-long mortgages.

He obtained freedom of information (FOI) data supplied by the Bank of England, showing that 42% of new mortgages in the fourth quarter of 2023 – or 91,394 – had terms going beyond the state pension age.

Emily Shepperd, Financial Conduct Authority (FCA) chief operating officer, recently said in a speech: “Alongside longer terms we also see a greater proportion of mortgages projected to mature around state retirement age. The projected median age of a first-time buyer at maturity is now 65 years old, up from 56 in 2005.

“The proportion of mortgage customers over 67 is currently less than 2% of all loans. By 2040 this rises to 5%, and by 2050 it is almost 10%.

“Lending into retirement is moving from a niche to a norm.”

Longer mortgage terms can make monthly payments more affordable, amid high house prices and elevated mortgage rates, but homeowners could end up paying more in interest over the longer term.

Karina Hutchins, UK Finance principal for mortgage policy, has said previously: “When reviewing new mortgage applications, lenders will act within the responsible lending rules set by the Financial Conduct Authority and carefully consider whether the borrower will be able to afford their mortgage in the future.

“This will include whether the requested term would take the borrower beyond their anticipated retirement age.

“Where this is the case, it is common practice for lenders to request proof of pension. Those closer to retirement, usually within 10 years, may need to satisfy their lender that they can afford the mortgage based on their retirement income.”