10:25 AM, 15th October 2021, About 2 years ago 5
The number of buy-to-let acquisitions made by later life landlords nearing retirement age increased by more than half following the re-opening of the housing market, more than any other age bracket, Paragon Bank analysis has revealed.
There was a 52% increase in the number of buy-to-let house purchases made by landlords aged between 60 and 64 in the 12 months to the end of June 2021 compared to the same period the year before.
This was the highest percentage increase of any age group, according to the analysis of industry data. However, as a proportion of the overall market, this age bracket remained the second smallest at 5.08% of buy-to-let purchases.
Richard Rowntree, Paragon Bank Managing Director, said: “There was a distinct spike in the number of purchases made by those nearing retirement age once the housing market reopened in May 2020. There could be many contributing reasons for this trend, with low returns from savings and stock market volatility being a potential factor as this demographic seeks to boost retirement income.
“The pandemic may have also led to an increase in people around this age deciding to either take redundancy or early retirement, which would have given them potential access to a lump sum of money to invest, or they are simply experienced landlords who took advantage of the Stamp Duty holiday to lower their purchasing costs. Of course, sadly, inheritance can also result in a one-off cash boost.”
Most buy-to-let lenders cater for older borrowers, including Paragon Bank, with the maximum age limit of 85 at the end of the term standard across the sector.
New buy-to-let house purchase by age of borrower
|%+ 2021 vs 2020||40||42||42||49||37||37||45||52||26|
|% Proportion of total June 2020||9.38||12.97||16.02||15.19||14.45||13.54||10.3||4.72||3.38|
|% Proportion of total June 2021||9.24||13.03||16.03||16||13.95||13.08||10.55||5.08||3.02|
Landlords aged between 40 and 44 recorded the second highest percentage increase at 49%, whilst this group recorded the greatest increase as a proportion of overall purchases, rising from 15.2% of the market in the year to the end of June 2020 to 16% this year.
The third highest increase was amongst 55 to 59-year-olds (45%), whilst over 65s recorded the weakest increase at 26%.
Richard Rowntree added: “While there was a sharp increase in older landlords purchasing new homes, it was also encouraging to see the majority of purchases in terms of absolute numbers being made by those aged between 35 and 50. This suggests that there’s a strong pipeline of younger landlords growing portfolios.”
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