Daily Telegraph opportunity - buy-to-let and pensioners

ended 25. November 2021

A journalist at the Telegraph is writing a follow-on article from this one her colleague wrote on the ‘rise of the retirement mortgage’. Her questions are:

  • Is this part of a wider race to relax rules so that pensioners can take out a buy-to-let loan?
  • Will all lenders now follow suit?
  • Are lenders trying to cash-in on boomers?

Anything else you think is relevant, send it across. Deadline is 5pm today. Keep it short and sweet - soundbites, not War and Peace!

5 responses from the Newspage community

Star Quote
"Where one lender leads, others tend to follow - so long as it is profitable to do so! With an ageing population and increased pension freedoms, it is in lenders' interests to capitalise on this market by altering lending policy. The term of a buy to let mortgage, which is supported by the rental payments, carries less importance than its residential counterpart given that the payments can continue to be made so long as the tenant remains in situ. Therefore the maximum age of the mortgage holder can be somewhat relaxed without great consequence. I think it is sensible to open up this section of the market to this generation as they tend to sit on the greatest capital wealth and can use buy to let as part of their ongoing retirement strategy."
"Retirement Interest-Only mortgages are now much more readily available than a few years ago. These are mainly for homeowners who still have a residential mortgage but no employment income. With regards to Buy to Let mortgages, most lenders are quite comfortable lending to age 75, 80 and even older in some cases. Lenders understand that a huge amount of the country's wealth is tied up in the properties of baby-boomers, and are looking for more and more ways to unlock this."
"Homeowners over the age of 55 do not have to prove income for equity release products, for which there has been a huge boom during 2021. It is a therefore a logical progression that buy-to-let lenders are starting to relax some of their rules to cater for this important market."
"This is not an attempt to do anything other than relax BTL lending rules so lenders get business. It's likely that more lenders will follow suit as they won't want to miss the boat. It will allow older people with capital to get a small BTL to provide additional income in retirement, however it may not always be the best idea and anyone considering this should seek professional financial advice."
"None of us is getting any younger, but all of us are getting older. And we are generally living longer, too. It's demographics. The demand for products for older borrowers is increasing, and lenders are looking to cash-in on the opportunity. That said, it makes sense for a mortgage lender to offer a longer term on a buy to let mortgage. This is because the mortgage is supported by rental income, not by employed income, so retirement age is pretty irrelevant. "It is a good move by the industry to allow flexibility for older landlords to continue to have a reliable income stream in retirement. In recent years, the Government has been widely criticised for rule and tax changes, which have been cited as the Government's agenda to squeeze smaller landlords out of the market. However, given the greater dilemma of funding state pensions for an ever growing, aging population, I am sure the Government will welcome these recent mortgage lender policy implorvements."