With all the election coverage, it’s important to remember that while it’s nearly 100 years since women were allowed to vote, it’s coming up to 50 years since women were allowed to take out a mortgage on their own, without the need for a male guarantor.
(This blog was written by a leading mortgage planning adviser)
Women have come such a long way in just 50 years! Back in the 1970s, the financial industry was largely dominated by men, with women often needing a male countersignature such as that of a husband, father or other relative to get a mortgage, along with other financial arrangements.
In 1975, a pivotal piece of legislation, The Sex Discrimination Act, was passed and aimed to address these inequalities. The act prohibited discrimination based on sex and marital status, promoting equality of opportunity between men and women generally. It marked the beginning of a long-awaited shift in empowering more women to access mortgages.
We’re thankful that the landscape of homeownership and mortgage acquisition for women has gone through significant transformation over the last five decades. In this time, women have had greater access to financial advice and resources, slowly narrowing the gap of gender-based disparities in mortgage approvals.
As we entered 2022, we saw the number of primary female (or sole) mortgage applicants increase from 29% in 2017 to 33% in 2021, highlighting how far we had come in terms of growing financial independence and confidence.
In contrast, however, there has only been a 2.8% increase in female mortgage holders over the last 10 years. This is likely down to a number of factors and goes way beyond broader societal changes, evolving gender roles and legislative advancements such as women needing an average of 12 times their annual salary to be able to buy a home in England, where men only require just over eight times.
The gender pay gap coupled with the cost-of-living crisis has made it harder to save for a deposit, particularly with the cost of renting being so high, making the possibilities of saving for a deposit even more challenging.
Increasing house prices have put homeownership out of reach for many. With increases of around 73% over the last 10 years in some regions, what was once deemed a generous deposit will no longer stretch as far as it needs to.
Then there are also different societal pressures for women and, for some, a number of misconceptions around the affordability of mortgages and their financial confidence.
Despite wider access to information and advice, it’s clear from some (not all) of the women I see on a daily basis that there are a number of misconceptions when it comes to homeownership that leave many thinking the dream of owning property is out of reach.
There is no denying that it’s been a somewhat challenging market over the last few years, but it is possible to own your own property if you’re armed with the right information.
RULES AROUND AFFORDABILITY
A key common misconception is around how mortgages are calculated. The amount you can borrow for a property is based on your income, expenses and deposit, not on the property value.
While the gender pay gap still exists, women may still find it harder to save for a deposit and qualify for the mortgage they want or need. We also have to consider that women often bear a significant portion of caregiving responsibilities, which can impact their financial stability and affordability compared to some men.
INNOVATION IN THE MORTGAGE MARKET
Despite what we hear in the media, lenders want to lend and most are doing what they can to help individuals get a foot on the property ladder. We’re seeing a number of innovative products coming onto the market as lenders look for ways to entice buyers.
Initiatives such as £5,000 deposits and 100% mortgages are available for the right buyer and property, which make it much easier for anyone to buy a home.
EXTENDED BORROWING AGE
Long gone are the days of only being able to borrow on a longer term if you are under the age of 45. Recognising that people are both living and working until later in life, some lenders will now offer a 30-year mortgage term to someone at 49 years old.
This is a huge help to many who find themselves buying a property later in life, perhaps after divorce or other circumstances. The benefit of this is that the borrower can borrow over a longer period of time, which often reduces their monthly payments. For many, this can mean the difference between being able to buy their home, and not.
THE NEED TO FEEL SAFE
I talk to my clients about this very important element every day. I’ve seen women trying to buy a property in the wrong area, but buying because it’s cheap. This is a big mistake.
If you don’t feel physically safe being in your home and walking to and from it at night, then it’s not the right property for you. You also need to feel financially safe when buying your new home.
There is no point borrowing more than you feel comfortable with if the payments are going to leave you feeling squeezed at the end of the month. Equally, if you want to borrow extra to finance any refurbishment on the property or consolidate any other debts, this could be the right way to do it.
Buying a property alone is a scary but often exciting time, marking a new chapter, and it’s important that we make those decisions with both our head and our heart. We must celebrate how far society has come in the last 50 years but also acknowledge that there is still more to be done, particularly around financial education and awareness.
Women have equal opportunities to achieve their homeownership dreams and mortgage advisers like me are here to help guide them along the way.
My advice to anyone who thinks they can’t afford to own a property is to speak to a mortgage adviser. Even if you can’t afford to do it straight away, a good adviser will help you work out a plan to get you there.
As we look to the future, the focus must remain on supporting women’s financial education and addressing income inequality. By doing so, we can ensure that women have equal opportunities to achieve their dreams of homeownership and financial independence, without the need for a man to validate their creditworthiness.
S Lindsay, Your Money.Com
How we can help
If you’re looking for a mortgage we’re here to help. But over and above that, as a woman, and whatever your situation in life — single, married, divorced, a new mum, working full time, a business owner or approaching retirement — there are a wealth of things you can do to improve your financial situation and we can give you that help and guidance, and make sure you understand your options.
To start the conversation come and speak to a Professional Adviser here at Logic Wealth Planning, to find out what more you could be doing to make your finances work for you. Call 0808 123 4321 to arrange a free no obligation meeting.
Logic Wealth Planning provides independent financial advice in Manchester, Bury, Rochdale, Cheshire, and the surrounding area, but not limited to the region.