Age is no longer a factor in a buy-to-let relationship

Here in the UK we live in an ageing population, with 11.4 million people over the age of 65. This is expected to grow by 12 per cent by 2020 and nearly double to 19 million by 2050. In fact, the average life expectancy in Britain is currently 81 years old.

Scott Hendry
19th July 2016
Scott Hendry

This has resulted in an increase in the number of retired landlords relying on rental incomes and property portfolios to boost their pension pots.

Buying property is now pitched to pensioners as one of the best ways to save for retirement and as a safe place to invest savings. A steady rise in house prices over the last few years has also fuelled this trend, and we’ve certainly seen more pensioners coming to us for auction finance with a view to enhance their income through property rental.

This is why you may have recently seen that we have removed the age limits on our buy-to-let and consumer buy-to-let mortgages, reflecting our common sense approach to lending.

For our first charge buy-to-let mortgages, the previous 80 year age limit has been removed. Affordability can be satisfied without income from employment, which essentially means that a retired customer with rental income or rental income plus pension will still have access to borrowing.

For our consumer buy-to-let products the age limit has been removed where rental income covers 120% of total secured lending repayments, and again, we consider pension income with a full affordability assessment.

With demand for buy-to-let mortgages from customers in their fifties and sixties, planning ahead for their retirements, our previous age limit meant that some investors were missing out on opportunities that were relevant to them.

Having even a small property portfolio can help fund retirement so, as with all of our product plans, we have adapted our offering to open doors for borrowers that a mainstream lender may not consider.

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