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Rise Of The Pensioner Landlords


Thursday, March 19, 2015
Rise Of The Pensioner Landlords

Rise Of The Pensioner Landlords

UK Buy To Let Property Market Braced For Surge
Of Pensioner Landlords

The UK private rented sector is bracing itself for the surge of  pensioner landlords who are ready to put some or all of their pension pots into buy to let properties, when the pension reforms come into force on 6th April 2015, representing the biggest change to the way pension holders manage their financial futures for decades.

Economists remain uncertain about the exact impact that the pension reforms will have on the UK economy, but there are indications that as many as 200,000 prospective pensioners could cash in their entire pension pots to enter the buy to let property arena as pensioner landlords.

According to data published by one of the UK’s leading independent financial service providers and asset management specialists, Hargreaves Lansdown:

  • 21% of pensioners intend to spend their hard earned savings on a holiday
  • 16% of pensioners plan to reinvest in property
  • 13% of pensioners plan to pay off debts
  • 12% of pensioners will use the money for home improvements

There has already been huge growth in the number of people over 50 buying up rental properties in order to boost their retirement income, and they are specifically choosing to invest in student properties according to The Mistoria Group. Who, along with banks and mortgage brokers have seen a surge in buyers in their fifties and sixties taking out buy-to-let mortgages, as a number of institutions scrap upper age limits for borrowers. Banks are lending more than £2 Billion (GBP) per month in buy-to-let mortgage deals, an increase of 60% more than last year, according to the Council of Mortgage Lenders (CML).

The growth of pensioner landlords is being fuelled by the removal of the age restrictions on residential and buy to let mortgages being changed and fantastic low-cost mortgage rates, making the UK buy-to-let market a very tempting prospect for many silver haired investors who are new to property investment.

Pensioners will utilise buy to let mortgages to finance their rental property purchases, with a view to building up an income producing rental property portfolio for their children, instead of leaving them cash.

UK property has always been a safe investment and although property prices rise and fall on a cyclic basis affecting capital appreciation, however, rental income does continue to increase, ensuring a better rental yield, year after year.

Recent estimates made by UK estate agent, Savills, suggest that the pension reforms put forward in the Chancellor’s 2014 Autumn budget could see the economy boosted by an extra £10 Billion (GBP), if just 20% of well-off UK pensioners decide to invest 10% of their pension pots in rental properties using buy-to-let mortgages and become pensioner landlords.


This was written by Mike Clarke. Posted on at 11:30 am. Filed under Buy To Let. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.