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Mortgage lenders in the UK have hiked the maximum age for home loans to 80

Major U.K. mortgage lenders hiked the upper-age limit for home loan approvals on Monday, as fears rise that lending standards in the country are becoming too loose again.

Halifax and Scottish Widows, which are both owned by Lloyds Banking Group, raised the maximum age to 80 years-old, which will allow Britons to buy houses later in life.

Nationwide Building Society will allow existing customers with retirement income to borrow up to the age of 80, with a maximum age at maturity of 85.

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The change will come less than week after U.K. banking giant Barclays said it would offer 100 percent mortgages, in a move which some fear echoes the risky lending practices that led to the global financial crisis of 2008.

Currently, the maximum age to gain a mortgage from Scottish Widows or Halifax is 75. Under the news rules, borrowers will still be required to provide evidence of anticipated retirement income. For joint mortgages, the maximum age will be applied to the oldest applicant, Lloyds told CNBC via email.

As well as easing credit conditions, the move reflects the longer life expectancy and workings lives of people in the U.K., where the government is gradually increasing the age at which the state pension can be claimed.


"I'm sure there are good reasons to be lending to older people given that people are going to be working later in their life … (but) … Banks are taking increasing risks now with their lending," Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, told CNBC on Friday.

Mortgage approvals are on an upward trend in the U.K., despite a small fall in February, the Bank of England reported in March. In the same month, Halifax said worsening sentiment on the U.K. economy and uncertainty ahead of June's referendum on the country's membership of the European Union could weaken the market going forward.


Tombs said the U.K.'s record-low interest rates were encouraging borrowers to take on mortgages that might prove unaffordable when rates eventually rise.

"I don't think we are in bubble territory yet, but I think if the Bank of England keep rates are on hold… financial stability risks are going to grow," he told CNBC on Friday.


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Dan Kitwood, Getty Images News