The latest data
from the Alliance and Leicester deserves more debate and attention than it will
receive in the mainstream press and media in a weekend which will surely be
dominated by World Cup news. Not least because it is quite a radical departure
from the typically anodyne ‘messages’ A&L appear to push with monotonous
regularity.
Generally the Firstrung team sift through A&L data in an attempt to unravel the
message so carefully designed by an army of sophists in order to provide the ‘feel
good’ factor. If that data is timed for release over the weekend, public
relations companies can demonstrate even greater success for their clients.
It is therefore with some surprise that A&L saw fit to publish data suggesting
that all was not well in the world of property ownership, particularly in the
over 50’s age group where (it now appears mistakenly) most below this age, and
particularly those struggling to climb onto the fabled first-rung, imagine there
would be no evidence of financial hardship, or lack of opportunity.
The image most would have of the over 50’s in the U.K. is one of; the majority
owning their own property and having bought in the late 70’s – early 80’s, have
enjoyed significant wage inflation, this would have neatly combined with overall
inflation resulting in the eradication of their mortgage debt. The conventional
mortgage was created in the early seventies to reach the masses, how could so
many have not taken advantage?
Today we learn that, according to A&L, a staggering 41% of over 50’s cannot
afford to buy their own property, even for a company such as Firstrung, that has
access to most up to date available data and the ability to disseminate it, this
came as quite a shock. Whilst we realised our proposition needed to expand (given
the average age of an FTB is now 34) beyond simple instructions on; how to
negotiate with estate-agents and what ‘gazumping’ meant, we could not imagine
creating relationships with SAGA or 50connect in order to offer advice to
struggling first time buyers.
Lenders encouraging guarantor and parent assistance mortgages should be equally
concerned as to the scope of their offerings. Propositions aimed at parents
giving financial aid to their children are surely now rendered equally pointless.
There is however another issue, just as serious, not covered in the data from
A&L; how does an ‘over 50’ obtain a mortgage given the necessary insurance
covenants required?
The short answer is they can’t, a 55 year old (in broad terms) will only be
offered a 15 year repayment mortgage with a 20% deposit, the insurance premiums
will also be sky high. Looking at this age group in isolation it appears as
equally hopeless as it does for those at 34 and below, (the average age of an
FTB)
Unless new more exotic loan products reach our shores, such as the disastrous ‘inter-generation
mortgages’ created in Japan in the late 80’s, then it looks increasingly likely
that a huge swathe of the UK population will be denied the opportunity of home
ownership. Of equal concern should be the realisation that competition to
purchase property appears to have straddled generations, most first time buyers
could not have imagined a scenario where they had to compete with their uncles
to climb onto the first-rung…..
Company: Firstrung.com
Contact Name: firstrung
Contact Email: paul@firstrung.com
Contact Phone: 07963 090558
All of the above text is a press release provided by the quoted organization.
globalagingtimes.com accepts no responsibility for their accuracy.
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