Industry mustn’t exclude older borrowers
Speaking at a CML conference with the theme ‘pension tension: new thinking on lending into retirement’ at St James’ Court Hotel, London, Sinclair branded the number of interest-only borrowers being forced to take out equity release as “very worrying”.
He also cautioned against retirees sinking their pensions into buy-to-let without thinking things through.
Sinclair said: “The industry needs to ensure that the income poor asset rich pensioners are well served by this market.
“That said, the recent growth in the number of people aged 55-64 taking equity release is potentially very worrying.
“We should be particularly worried about those retirees with interest only mortgages but no linked investment.
He added: “Whilst the introduction of pension freedoms could be a boon to the buy-to-let sector, older people should make sure they take advice before making the jump.”
Sinclair also urged the government to push ahead with housebuilding plans to ensure that older people have more options to move to more appropriate homes.
ILC-UK research from 2013 found that one in five of all households (21%) headed by an over-50 year old had some outstanding mortgage borrowing on their home and the same was true of one in 10 over-65 households.
Older borrowers still had moderate mortgage debts, as the typical 65-69 year old households with a mortgage still owed £55,200.
At the time more than a third of over-70s with outstanding borrowing had an unlinked interest only mortgage