Lenders must develop downsizer mortgages
Speaking at myhomemove’s annual conference in Burton-on-Trent this morning Adrian MacDiarmid, head of mortgage lender relations at Barratt, said there was a severe shortage of suitable properties for people heading towards retirement who want to downsize.
But he said builders couldn’t justify building more homes that would cater for this demographic until lenders found a way to open up the supply of mortgages to older people.
He said: “We are talking to lenders about this specific issue because we see this area of the market as a significant opportunity for growth.”
MacDiarmid added that Barratt continued to be disappointed that some of the UK’s biggest lenders still “discriminate” against new build flats.
Both Nationwide Building Society and Royal Bank of Scotland will lend only up to 75% loan-to-value on new build flats versus a higher LTV on new build houses.
He said: “This just doesn’t seem commensurate with the risk.”
MacDiarmid also called on lenders to consider their obligation to treat customers fairly.
He suggested that there is demonstrative evidence that new build properties tended not only to be more affordable for borrowers but also that given builders offer guarantees on services, the cost of living in a new home is also more affordable for the first five years.
He said: “We want to talk to lenders about how we consider this in order to facilitate our industry to build more new homes.”