1 in 7 over-70s still haven’t paid of f their mortgages
MILLIONS of pensioners are still paying off their mortgages well into retirement. One in seven over-70s and a third of over-50s are lumbered with home loans.
Britons older than 70 with an outstanding mortgage typically owe £40,000, rising to £50,000 among the over-50s. Saga, which surveyed 1,500 homeowners, said many were forced to use their weekly pension to pay off what they owed, instead of using the money to enjoy their retirement.
Soaring house prices have meant that even those who downsize have struggled to clear their mortgage debts. Others have been told by banks they are too old to move on to a cheaper fixed-rate deal following the introduction of tougher lending rules a year ago.
Alex Edmans of Saga Personal Finance said: ‘Millions of older homeowners have found themselves abandoned by mortgage lenders and stuck on uncompetitive deals because of the unfair age restrictions that many lenders have in place.
‘If these people had access to a better deal they wouldn’t have to pay as much back each month which would leave them with more money to enjoy their retirement.’
He said lifetime mortgages, where the outstanding debt is repaid after death, were an option for those struggling to pay their mortgage with their pension income.
Separate figures yesterday revealed that house prices have jumped by £14,000 over the past year.
The average UK property is now worth £282,000, according to the Office for National Statistics.
The sharp rise was blamed on a continued lack of supply, with housebuilding failing to match demand.
Homeowners in the East of England have seen the sharpest rises, with prices leaping by more than 8 per cent – compared with 5 per cent nationally. Prices rose by less than 1 per cent in the north-east of England and fell by 1 per cent in Scotland.
Campbell Robb, of housing charity Shelter, said the hikes in more affluent areas have left many families unable to afford a home.
‘Not addressing our dramatic shortage of homes is pushing house prices higher and higher, and a stable home further out of reach for millions of young people and families,’ he said.
‘Instead they’re trapped in expensive and insecure private renting, or stuck in childhood bedrooms.’
The average cost of a home in London has rocketed by £255,000 over the past ten years to £525,000.
Richard Snook, an economist at PwC, said: ‘The UK’s robust economic performance, record low interest rates and well documented supply shortages continue to push up house prices.’