A growing number of older investors are turning to buy-to-let property to supplement their income, new figures suggest.
Fresh data from Commercial Trust shows an uptake in the number of older people applying for buy-to-let mortgages.
The data reveals that there was a 5.43% increase in the proportion of buy-to-let applications last year through the specialist buy-to-let broker by those aged 65-75, compared to 2017 data.
Comparing buy-to-let mortgage applications by age demographics, 25-34-year olds recorded a marginal increase of 0.03%, while Commercial Trust also reported a 4% increase in the proportion of buy-to-let purchases and remortgages from the over 55s, from 2017 to 2018.
Last year, over 55s 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 remortgages came from the age group 45 to 54, at 27% of all business.
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.”
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