At the height of the pandemic in August 2020, Charlotte Grimshaw joined Ipswich Building Society as Head of Mortgages and has since made significant changes to the Society’s later life lending policies.
In this, the first of a series of blog posts on later life mortgages and borrowing, Charlotte discusses the challenges and rewards of lending to people over the age of 50.
During your first year at Ipswich Building Society, you were involved with changing the way the Society lends to older borrowers by removing later life products and allowing over 50s to apply for the same products as younger people. Why was that important to you?
Although there is no doubt that the building society sector has championed later life lending, older borrowers are still underserved in terms of standard mortgage options in the market as a whole.
I believe that age alone should not be the determining factor for mortgage eligibility. Of course lenders have many component parts that they need to take into account when someone applies for a mortgage (such as sustainability of income, affordability, circumstances, and the property itself) but if all of these areas make lending a sensible option, then age alone should not be an issue.
Who is a typical Ipswich Building Society later life customer?
We honestly don’t have a typical later life customer. We see everything from remortgaging to buy out a partner (silver splitters is the affectionate term I believe); upsizing to a dream home to accommodate a growing family with grandchildren; downsizing to something more manageable and cost efficient; raising money to gift to younger family members to help them get on the property ladder; to buy a second home or holiday home; for home improvements; and buy to lets to boost retirement income going forward.
We see customers from early retirees, through to those who want to continue working well past typical retirement age and those who don’t want to retire at all. Our later life customers range from their 50s all the way through to their 90s!
What do you think are the biggest hurdles that later life borrowers face today?
The biggest hurdles are probably a lack of awareness and understanding of their options, as many people don’t delve any deeper than the high street to find a mortgage.
Whilst the number of lenders and products in this area has grown, as an industry, we know we’ve still got more work to do. We want all older applicants to know that it is possible to get a mortgage and not simply assume that equity release is their only option.
Even members of my own family are shocked when I say we lend to people in retirement on the same terms as people in their 30s and 40s. We, and others, need to keep banging this drum so that awareness improves amongst over 55s.
What three things would you like mature borrowers to know about getting a mortgage?
That it’s not as difficult as you might think! That there is a lot of support available from mortgage advisers and lenders. And lastly, (it’s a bit technical so bear with me), that lenders will look at what income borrowers have ‘available’, not just at the income they are currently taking (for example, pension pots). This can help borrowers get the loan they require without having to actually increase the income they are taking from their assets.
What else at Ipswich Building Society needs a ‘Charlotte’ makeover next?
We’re in the midst of very exciting times as we’re in the process of renaming to become the Suffolk Building Society later this year. I can’t take credit for this as much of the work was undertaken before I joined the Society but it is a better and true representation of the county we call home and our membership base.
That said, I’m always looking at how we can improve our mortgage products and have my beady eyes on several areas. I’d love to look at eco mortgages as I think they will be a big talking point in the future. Nothing is firmly on the cards but there’s plenty I’d like to get my teeth into!
Lastly, if you were able to influence the Treasury or the Ministry of Housing, what one change would you make to property or finance regulations in this country?
Just the one change? That’s tough.
I would like there to be a common sense approach to lending to people who have managed to pay rent for years but who, on paper, might not fit affordability rules.
I think there’s a lot more that could be done and it’s something I have come to appreciate more since moving from the North West to the South East with property prices and rent being that much higher.
We’ll be uploading more blog content to support later life lenders in the coming weeks, so please follow us on social media or keep an eye out on our site.