UK mortgages: over 65 and still got it

It has emerged that almost 600,000 Britons over the age of 65 have a mortgage. While some have 'lifetime' mortgages, many are paying for their mortgages using their pensions. With the current pension crisis and first time buyers getting older, the future looks ever bleaker as more and more pensioners will fall into this situation.

The latest figures from the Office of National Statistics reveal that almost 600,000 people over 65 - nearly one in ten pensioners - still owe money on their homes. Some pensioners have a 'lifetime' mortgage, meaning they do not make repayments because the debt is recoverable when they die through the sale of their home. Worryingly however, many pensioners are relying on state pensions to meet mortgage repayments, leaving them little left over for life's essentials.

While a significant proportion of pensioners currently find themselves in this difficult situation the future looks even worse. This is because first time buyers are increasingly getting older, due to the difficulties in becoming property owners and the fact that younger people are staying in higher education for longer, thereby entering the labor market later.

The average age of a first time buyer in the UK is currently 34, up from 31 in 1983, with nothing to suggest that the age of first time buyers will decrease or even level out in the near future.

So the future for a typical twenty something living in Britain might involve borrowing money from parents or friends to afford the deposit on a house, followed by a life of poverty (recent government statistics showing that nearly six out of ten people defined as in poverty are homeowners).

And instead of looking forward to a comfortable retirement, old age will see them still making mortgage repayments on a pension which in real terms will be less than a current pensioner receives.

©2006 Business Review Ltd
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