As difficult as it has been at times through life’s considerable ups and downs to keep hold of the family home, I sorely feel for the misnomered Generation Rent, which isn’t a cohort of folk of similar age but rather a hearty mix of younger and older people caught in the wedge of Morton’s Fork.

For those who don’t know – I didn’t until very recently – the 15th century English prelate John Morton decided in his capacity as Lord Chancellor under Henry VII to raise taxes that were known at that time as “benevolence” to the king. He justified this by reasoning that those living modestly must be saving their money while those living lavishly were obviously rich, so all could afford to pay. Thus his name became attached to the allusion Morton’s Fork – a false dilemma in which contradictory observations lead to the same conclusion.

It’s a perfect description for the situation facing many who have not bought or are not in the process of purchasing their home, and while some property owners may choose at this point to turn their face away, the struggles of Generation Rent will be a sizable problem for all in the not-too-distant future.

Data released yesterday which was obtained by a Freedom of Information (FoI) request by former Lib Dem pensions minister Steven Webb shows that homebuyers are increasingly being forced to gamble with their retirement prospects by taking on ultra-long mortgages that last beyond the end of their working lives.

Longer borrowing terms bring down monthly mortgage costs and can mean the difference between being able to afford a home or not in markets where property prices have been running ahead of inflation for decades, while the surge in UK interest rates since the end of 2021 has piled on further costs. However, it also raises the prospect of buyers using limited retirement savings to clear a mortgage, leaving them at greater risk of pension poverty.

According to the data acquired from the Bank of England, 42% of new mortgages in the fourth quarter of 2023 (91,394) had terms going beyond the state pension age. That compares to 38% a year earlier, and 31% in the final quarter of 2021.

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People aged 30 to 39 – who would typically be expected to be taking out their first mortgage – accounted for 30,943 home loans lasting beyond the borrower’s state pension age, or 39% of that market. That was up from 23% two years earlier.

There were 32,305 such mortgages arranged for borrowers between the ages of 40 and 49, accounting for 57% of the market. In 2021 the proportion was 42%.

According to the former pensions minister, these “shocking” increases raise “serious questions” as to whether mortgage providers are acting in borrowers’ best interests, as is required under the Financial Conduct Authority’s (FCA’s) responsible lending rules.

“The challenge of getting on the housing ladder is forcing large numbers of young homebuyers to gamble with their retirement prospects by taking on ultra-long mortgages,” said Mr Webb, who is now a partner at pensions consultancy LCP.

“We already know that millions of people are not saving enough for their retirement and if some of that limited retirement saving has to be used to clear a mortgage balance at retirement they will be at even greater risk of poverty in old age.”

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While this is undeniably true, the alternative strategy in this high-stakes game of “to buy or not to buy” has a depressingly similar downside as studies have repeatedly shown that retirement-age renters are at significantly greater risk of pension poverty than their homeowning counterparts.

Research released earlier this year by Hargreaves Lansdown found that just 18% of renters are on track for a “moderate” retirement, compared to 55% of mortgage holders and 51% of those who own their home outright. This echoes earlier findings from the Pensions Policy Institute (PPI) which produced a first-of-its-kind forecast simulation in December exploring the risks of falling home ownership, an increase in private renting, and the shrinking social housing sector.

According to the PPI’s modelling, if current home ownership trends among today’s 45- to 64-year-olds continue and other factors remain the same, the proportion of households that own their home in retirement will fall from 78% to 63% by 2041. At the same time, the proportion of retired households living in the private rental sector will rise from 6% to 17%.

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Further research by Royal London has suggested that if someone is privately renting later in life, they will need a pension pot of almost double that of someone who owns their home outright to maintain their living standards.

The structural demographic shift towards renting in later life points towards a surge in those dependant on housing benefit to afford the cost of their home. The burden of that will fall on all future taxpayers, yet no one seems prepared to tackle the root of the problem which is a serious shortfall of affordable housing across Scotland and the UK.

Edinburgh Council – one of five in Scotland that has declared a housing emergency – said last week that it does not expect to give the go-ahead to any new affordable homes for at least the next year after nearly £200 million was slashed from housing spending in the Scottish Government’s latest budget. This has been accompanied by spiralling inflation and construction costs that have created the “most challenging period in 40 years” according to those in the social housing sector.

Along with education, health and infrastructure, housing must become a central tenant of government at all levels. These are the fundamentals from which poor productivity and anaemic economic growth can be lifted, and investment in these strategic foundations is the only viable course of action to avoid the massive problems being stored up for a future which is coming fast.