The Ipswich Building Society is predicting that mortgage lending will become more “family-centric” in the coming year, as people adapt to new ways of living and working.
Charlotte Grimshaw, the Ipswich Building Society’s head of mortgage sales, said: “As remote working and hybrid models become more prevalent, being tied to large cities and commuter towns could become a thing of the past. If employees are only required to visit the office occasionally, suddenly it becomes possible to have the best of both worlds; a successful career and an ideal work-life balance in a location of your choosing.
“More people will be able to achieve their dreams of escaping to the country, but crucially, before retirement. Many may take this opportunity to move closer to family, especially as the cost of childcare remains unrealistic for some.”
She also believes that midlife borrowing will to rise thanks to divorce-fuelled downsizing.
She said: “As multiple lockdowns place a stress on married life and, sadly, divorce applications rise, those who share children are likely to be searching for two smaller family homes, leading to a spike in single application mortgages.
“People who might have had the end of their mortgage in sight, may now take on more debt to be able to afford a house on their own, possibly extending the length of their mortgage too. With protracted divorce settlements and custody arrangements, the full impact of lockdown divorces on the mortgage industry likely won’t be realised fully until the second half of 2021 or beyond.
“However, it’s important to remember, just a few years ago this kind of midlife borrowing wouldn’t have been available as providers were far more hesitant to lend to people in their forties and fifties. Those in this situation now should be able to choose between a wider variety of lenders and mortgage deals.”
Grimshaw also believes that the rise of multi-generational living, as well as the popularity of gifted deposits, will also be factors.
“We’re forecasting this to continue in 2021, with parents and grandparents helping to boost the size of their deposit, unlocking their offspring’s ability to buy their own home, buy a larger property than they could have otherwise afforded, or secure a better mortgage deal,” she added.
Original Article from Best Advice 16/12/2020