Mortgaged homeowners make up nearly half of buyers under 40
Mortgaged homeowners had a harder time climbing the “property ladder.”
Nearly half (45%) of mortgaged homeowners under the age of 40 got onto the property ladder “much later” than they expected, compared with 29% of over-40s, according to new research by the Equity Release Council (the Council) which highlights the British public’s changing relationship with bricks and mortar.
A study of 5,000 UK adults’ financial experiences also shows 43% of mortgaged homeowners under the age of 40 relied on financial help from family or friends to buy their first home. In comparison, just 23% of those aged 40+ relied on similar support to get onto the property ladder.
The rise of ‘delayed homeownership’ means having a mortgage in later life is likely to become more usual for consumers. Nearly one in three (32%) homeowners with a mortgage are unsure if they will become ‘mortgage free’ before they retire or have already ruled it out. One in five (20%) feel the idea of retiring ‘mortgage free’ is unrealistic.
Instead, the Council’s research highlights attitudes to secured debt in retirement are changing, as nearly one in four mortgaged homeowners (24%) say they don’t mind if they are still paying off their loan in later life. Nearly half (47%) believe their generation’s attitude to debt in later life is more accepting than their parents, with those aged 25-34 most likely to feel this way (52%).
The findings show the majority (70%) of mortgaged homeowners feel comfortable with their current level of mortgage debt, rising to three in four (75%) of those aged 50+. Many also feel taking out a mortgage in later life can benefit them: 32% see it as a way to provide money to improve their lifestyles, while 31% see it as a way to access funds to help out family members.
One in three mortgaged homeowners (33%) feel financial services providers are getting better at offering mortgages to people in retirement. However, the need for clear information is apparent as 36% say they are confused about what mortgages are available to people in later life. The Council’s research suggests confusion is highest among the under–40s (42%).
Jim Boyd, CEO of the Equity Release Council, comments: “The realities of delayed homeownership are prompting people to reassess their attitudes to secured debt in later life. There are clear signs that paying a mortgage in retirement is no longer taboo: for many people, it can make the difference between financial hardship and enjoying a more comfortable lifestyle while also supporting family members.
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