More than a third of people in the UK don’t expect to finish paying off their mortgage until they’re in their sixties, according to research by Post Office Mortgages.
It could be said that this trend is inevitable, given that the average age of today’s first-time buyers is 33. According to the Post Office, things have changed dramatically since a generation ago when the average age to pay off a mortgage was 51. John Willcock, head of Post Office Mortgages said:
“For many, the flexibility that remortgaging offers means [people] often use their mortgage to invest in additional properties or to improve their current home - again pushing the age up”
“Wider societal trends, such as multi-generational living, higher divorce rates, and the need to pay for university fees are also having an impact and pushing back the age at which we might finally be able to say we truly ‘own' our homes.”
This research comes as the Office for National Statistics (ONS) released their May House Price Index, showing that average property values had risen again, by 2.9%, in the twelve months up to April 2013. However steeper price rises in more expensive areas of the UK, such as London, may go some way towards distorting national average figures, Over the same period London saw an average rise of 6.6%. Rising prices are one of the factors making it difficult for younger people to get on the property ladder.
Andy Knee, chief executive of conveyance experts LMS commented that, for many first-time buyers, the biggest obstacle to homeownership is securing a deposit. Knee said that “dreams of homeownership are dwindling” and that without more help, we will see many people “resigning themselves to rent forever”.
It is hoped that the government’s Help to Buy scheme, which allows first-time buyers to take an equity loan from the government towards their deposit, will enable more people to take out the mortgage. However, the scheme has been criticised by some housebuilding companies, who fear that it will create a “property bubble” that could burst when the scheme ends.