1 in 3 in Yorkshire will have to work past retirement age to pay off mortgage

Almost one in three of the region’s 20 to 45-year-olds say they expect to still be working to pay off their home loan after they reach the age of 60, a survey from the Halifax has found.

A third say they are considering getting a mortgage that spans beyond 25 years in order to get a suitable property.

A separate study by Post Office Money Mortgages has warned that major cities are becoming “unaffordable blackspots” for first-time buyers.

It found that 20 years ago, 91 per cent of Leeds was deemed to be “affordable” to first-time buyers, with that figure falling dramatically to just 68 per cent in 2015.

Would-be property owners in Yorkshire’s second biggest city, Sheffield, face a similar struggle, with just 80 per cent of the city deemed affordable last year compared with 97 per cent in 1995.

Housing charity Shelter has warned that the “chronic lack” of affordable homes is leaving a growing number of Yorkshire families and young people “unable to put down roots”.

National data from Halifax’s annual Generation Rent report showed that more than half of the 8,000 people surveyed, 51 per cent, are worried that paying their mortgage will hamper their ability to save for retirement.

It found that high property prices are perceived by people not yet on the property ladder as an increasingly large barrier to home ownership, with 60 per cent of people saying this is an issue compared with 52 per cent in 2011.

The average price of a first property in the UK has leapt by nearly £62,000 since 2010 - from £134,889 to £196,801, Halifax said.

Craig McKinlay, mortgages director at Halifax, said that home ownership clearly remains a “key aspiration” for young people, with some becoming “increasingly resourceful” in their fight to reach the ladder.

But he said borrowers should be cautious about extending their mortgage term beyond 25 years - as it could increase the overall cost of the mortgage, and have a knock-on effect on quality of life in retirement.

He said: “A longer term will reduce monthly payments, but as home owners build up equity they should look to reduce this term or make overpayments to ensure that the dream of owning their own home doesn’t turn into an unnecessary nightmare in later years.”

Chief executive of Shelter, Campbell Robb, said: “While this research shows that thousands of young people in Yorkshire still dream of a home of their own, sky-rocketing house prices mean it’s no surprise so many fear paying off a mortgage well into their twilight years. 
“Something needs to change. The Government must give back hope to the priced-out generation by building homes that people on ordinary incomes can actually afford to rent or buy.”

The Post Office’s research found that 87 per cent of those who bought their first home in the last year said they were forced to lower their expectations to get on the ladder, compared with 29 per cent who bought more than 20 years ago.

Nearly a quarter of first-time buyers within the past year moved further away from local transport links than they had planned, and a fifth sacrificed living close to good schools.