The Blog

A collection of articles to help you sell, buy and let

Pension Reform and Investment in Property


The mass of headlines around the pension freedoms that came in on 6th April, will have left thousands of older people wondering whether they should use some of their retirement cash to put down a deposit on a property to let out.

Lower buy-to-let mortgage rates and higher rents, will help make the maths stack up for would-be landlords but will, of course, make for depressing reading for tenants. Now is a good time to buy and there is always a healthy number of professional tenants competing to obtain a quality rental property. There are on average 7-10 tenants for every quality rental property that comes to the market.  As a potential landlord you can pick and choose the best tenant. It’s not about over-charging a tenant, it’s about the quality of a tenant and longevity. Buy-to-let mortgage rates are tumbling – which is great news for those who are thinking about spending some of their newly liberated pension pot on an investment property. My colleagues at The Mortgage Advice Bureau (the largest broker of mortgages in the UK) have some fantastic rates and can show you many ways to help you achieve your goals.

Older borrowers may come up against age restrictions with some lenders – often, the maximum age a customer can be at the end of their mortgage is 70 or 75. However, a year ago, The Mortgage Works – the specialist lending arm of Nationwide building society – changed its rules and introduced a maximum age at which borrowers can apply for a buy-to-let mortgage, of 70. Not only that, the lender will go up to a maximum mortgage term of 35 years – so in theory at least, you could still have a home loan when you were nudging 105. Earlier this month it emerged that the Financial Ombudsman Service had found HSBC guilty of age discrimination, after it refused a couple’s mortgage application on the grounds that the husband would be over 65 at the end of the term. That ruling could make it more likely that other lenders will start taking a more lenient view when it comes to older mortgage borrowers.

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