"The ways in which people today are earning, spending, saving and borrowing money has changed and it’s continuing to shift, and the way in which customers are using mortgages to support their life choices and life changes are also different."
It’s a fact increasingly acknowledged by brokers and lenders alike, that customer-centric lending is the only way forward for the UK mortgage market, and it seems this future is finally here.
In a world where the average age of a first-time property buyer is 34 and the state pension age is 66, any expectations a homeowner might have had of owning their property outright before retirement age are looking more like wishful thinking than financial planning.
Lenders in all areas of the market have been working harder than ever to accommodate a range of increasingly diverse needs on behalf of their customers in recent years. None more so than those of us operating in what has for too long been referred to as the ‘later life’ lending sector. A sector which is at long last recognising that just because someone turns 50, it doesn’t mean they automatically start reaching for comfy chairs and cardigans.
A few weeks ago, Hodge announced it was launching a re-worked version of its professional mortgage product range which will now be known as ‘Hodge Resi’ in reflection of its ability to provide more inclusive borrowing options for customers with complex income requirements aged from 21 right up and into retirement age.
Inclusive of a fee-free option and a reduction in fee paying rates of up to 45bps, the new range will help more customers across all occupations. It will help those with complex borrowing requirements maximise their affordability by offering a 40-year term using working income to age 80, along with higher loan to income ratios and interest-only being assessed on an interest-only basis.
To put this in layman’s terms, Hodge is adopting a more common-sense approach to accepting standard and nonstandard income from employed and self-employed mortgage applicants of all ages in response to wide ranging pressures coming at lenders operating in all areas of the mortgage market, UK-wide.
Put simply, we’re beyond defining applicants solely by their age, stage or professional standing and are choosing to operate within a wholly inclusive financial sector where every case is assessed on its own merit. As a lender conventionally associated with ‘later life lending’ this is a massive step change for Hodge, but also for the wider mortgage industry too.
As mortgage providers we’re no longer supporting borrowers in later life, we’re now simply lending for life. And the most exciting thing about it is, it’s just the start, not only for Hodge as a market-leading specialist in providing complex lending solutions, but for the UK market as a whole – because, let’s be honest, it has to be.
The ways in which people today are earning, spending, saving and borrowing money has changed and it’s continuing to shift, and the way in which customers are using mortgages to support their life choices and life changes are also different.
Hodge’s new outlook shows that, with a flexible human touch and a wealth of bespoke underwriting experience in tow, it’s possible to offer support to clients based simply on a needs vs affordability basis. This is just the start of us ensuring brokers are getting the products they need to serve all their customers properly and responsibly.
What’s exciting about this is, where there has for so long been discussion around the merging of the residential and later life lending mortgage markets here in the UK, it’s now very much becoming reality.
And for us as a mortgage team at Hodge, it’s also a very exciting time. The feedback we have been getting from our intermediary partners has been listened to, we have gone back to our colleagues and told them what the market needs and have, together with the wider Hodge team, come up with a product we believe, answers all of those market wants. It gives us an opportunity to service a demographic that hasn’t traditionally been in our remit, which is also exciting, exhilarating and very rewarding.
