Newly released data from specialist buy to let broker, Commercial Trust Limited, has revealed that the idea of slowing down for a large number of the UK's senior population is not an option.
Comparing buy to let mortgage applications by age demographics, just two brackets increased their proportion of overall applications during 2018. 25-34-year olds recorded a tiny increase of 0.03%, but the stand-out group was for those aged 65-75 years, who increased the proportion of buy to let applications by 5.43%, compared to 2017 data.
Commercial Trust reported a 4% increase in the proportion of buy to let purchases and re-mortgages from the over 55s, from 2017 to 2018. Last year, this age group represented 39% of this buy to let activity, having accounted for 35% in 2017. The numbers were even more marked when considering purchase-only applications; in 2017, over 55s were responsible for 21.7% of this business at Commercial Trust. That figure rose to 29.7% in 2018, an 8% increase year-on-year.
The biggest overall proportion of purchases and re-mortgages came from the age group 45 to 54, at 27% of all business.
A changing market
The trend for more, older buy to let mortgage applicants, has been recognised by a number of lenders, who in recent times have increased the maximum age at which an applicant can apply for a buy to let mortgage, or the maximum age permitted at the end of the mortgage term.
Santander recently increased their maximum age at the end of the mortgage term criteria from 75 to 85 years old, and the maximum mortgage term on its buy-to-let range from 25 years to 40 years.
Some lenders offer buy to let mortgages with no maximum age at application, while a number of the more established lenders have a maximum starting age of 80 years old.
Precise are happy for those borrowers meeting criteria, to finish the mortgage at 110 years old, while The Mortgage Works sets no maximum age at term end, for experienced landlords.
Andrew Turner, chief executive at Commercial Trust, said: “Our look at the age demographics for 2018 buy to let mortgage activity, suggests that increasing numbers of older people are recognising the potential of buy to let investments.
Our data indicates that many people, reaching retirement, are choosing to invest in bricks and mortar and the rental market, as a means to fund their retirement years. Investing in property has the potential to deliver attractive rental yields and achieve capital growth, despite industry changes. I fully expect that the returns fair better than many other forms of investment.”