Property values in Wimbledon Village could rise after two of the UK’s biggest mortgage providers announced they are to relax their lending policies for older customers.
Nationwide Building Society is increasing its upper age limit for paying off a mortgage to 85 from July, while Halifax has already raised its upper age limit for settling home loans from 75 to 80.
The news follows the release of data showing the average price of a house in London is now over £600,000 and more than £1.6m in Wimbledon Village.
According to one property price index, the average value of a house in the capital has more than doubled over the last seven years to £600,625 – 11% higher than 2015.
Nationwide says its mortgage policy change will enable existing customers with retirement income to borrow up to the age of 80, with a maximum age at maturity of 85.
The option will be available on all standard Nationwide mortgage products up to 60% loan-to-value and with a maximum loan size of £150,000.
Henry Jordan, Nationwide head of mortgages, says: “We are taking a series of steps to meet a growing demand from customers to be able to borrow in later life.
“These customers are often asset rich, with significant equity in their home, and they wish to have the flexibility to borrow against it.”
Halifax, which is part of Britain’s biggest mortgage lender Lloyds Banking Group, says its new mortgage rules are a response to changing demographics.
Stephen Noakes, managing director for retail customer products at Halifax, says: “As demographics and working habits continue to change, we continually review our products and policies to ensure they reflect the evolving needs of our customers, including those who wish to continue working longer.”
Property commentators say that the move could increase the value of homes in areas like Wimbledon Village, Coombe Hill and Southfields.
It is claimed that the greater flexibility will boost the number of pensioners increasing borrowing to pass on deposits to their children.
However, Halifax says it will only extend the term of its home loans if borrowers can prove they have sufficient pension and investment income beyond the age of 70.
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