Drop in buy to let mortgages as older landlords sell up
12:02 AM, 21st February 2024, 2 years ago
6
The number of landlords taking out new buy to let mortgages has plummeted, according to new figures.
According to UK Finance, buy-to-let loans amongst over-55s fell from 16,930 in the final quarter of 2022 to 7,980 in Q4 2023.
Around half of new mortgages for the over 55s were for house purchases or remortgages (14,625) – down 21% in a year.
Older landlords are selling up
Sarah Coles, head of personal finance at Hargreaves Lansdown says amid high interest rates and regulations, older landlords have had enough and are selling up.
She said: “New buy-to-let mortgages have fallen off a cliff among older landlords, with the number of these loans halving in a year.”
“Given that older people makeup more than a fifth of all buy-to-let loans, this has a wider effect on the broader market.
“As more older people decide that being a private landlord isn’t as rewarding or as tax-efficient as they had hoped, it means they’re selling up, which puts more pressure on rising rents again.”
Inflation more stubborn than expected
Ms Coles adds the property market is beginning to stabilize.
She said: “The more positive news is that the pressure has been easing since these figures were released and lower mortgage rates will have taken less of a toll in recent months.
“However, falling mortgage rates have stalled more recently, as the market digests the fact that inflation is more stubborn than they expected. It means we can’t rely on swift rate cuts to get us out of trouble financially in retirement.”
According to UK Finance, later-life BTL loans in Q4 2023 represented around 22% of all BTL mortgages.
Tags:
Buy to let, Buy to let mortgages, Hargreaves Lansdown, Housing market, mortgages, Property market, Rental market, UK Finance
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Quadruple surge in fake tenancy applications
Member Since December 2023 - Comments: 1574
9:48 AM, 21st February 2024, About 2 years ago
Where will the next generation of landlords come from?
Just a few years ago, my children would have been happy to inherit tenanted properties.
Gross income from the properties averages around 7%.
With no interest payments to offset, their net returns would be around 4.5% if they remain in the 20% tax band and repairs, maintenance etc., remain around 15% of rent paid (and there are no non-paying tenants).
More recently, they say that they wouldn’t wish to be landlords.
So, thanks to Government taxation and over-regulation – coupled with landlord-bashing and bullying from campaign groups, my tenants will probably be evicted after I die.
The PRS will only represent a small proportion of tenure-types in 20 years time.
Member Since December 2014 - Comments: 90
9:55 AM, 21st February 2024, About 2 years ago
I think this can potentially be miss leading. Landlords who are looking at retiring also bought their assets some 20-25 years ago. With that in mind, the mortgages would be quite small if they just keep rolling them over without further draw down. As such, it’s not too hard to just sell one and pay three off.
Member Since January 2017 - Comments: 110
10:28 AM, 21st February 2024, About 2 years ago
Not true according to OSB Group!
7 out of 10 Landlords are buying more.
Rubbish.
Member Since May 2017 - Comments: 763
12:42 PM, 21st February 2024, About 2 years ago
My children have emphatically told me they do not want my business. They have seen me on call 24/7 and the way a few tenants leave an horrendous mess and behave so badly. Combined with the risk of having a really bad tenant (supported by the likes of Shelter), loss of rent and fines, who would want to take it on? They can earn more with a stress free life working 40 hours a week, with holiday pay, sick pay and pension tax relief by working for an employer who appreciates them.
Member Since March 2023 - Comments: 24
4:22 PM, 26th March 2024, About 2 years ago
Reply to the comment left by Cider Drinker at 21/02/2024 – 09:48I agree I have a low base rate tracker mortgage which will end soon I have very long term tenants who I charge a very fair rent to and I intended to remortgage and let them stay even longer term It is now a much less attractive option if the RFB goes through as is and with capital gains tax to pay I am going to get out and sleep easier So well done Mr Gove another family to rehome !!
Member Since March 2023 - Comments: 24
4:27 PM, 26th March 2024, About 2 years ago
I agree I have a low base rate tracker mortgage which will end soon I have very long term tenants who I charge a very fair rent to and I intended to remortgage and let them stay even longer term It is now a much less attractive option if the RFB goes through as is and with capital gains tax to pay I am going to get out and sleep easier