With the UK population getting older, more high-street banks and building societies clamour to launch new products and change existing terms to meet an ageing population. According to ONS, the population share of later-life age groups is set to increase further in future years. By 2066 there could be an additional 8.6 million people aged 65 years and over in the UK – a population roughly the size of present-day London. This would mean the UK’s 65 years and over will account for 26.5% of the projected population, approximately 20.4 million people.
Older borrowers are now being spoilt with options. A recent study from ‘Which?’ showed that 65% of the total buy-to-let mortgage products currently on the market have a maximum limit at the end of the loan term of 85 years and above. Furthermore, exactly 20% of current mortgage products have no age limit at all.
A changing market
Data indicates that many people, reaching retirement, are choosing to invest into the rental market due to attractive rental yields and growth prospects, despite industry changes and lenders are responding to the changing demand in the market. Santander has recently expanded their buy-to-let criteria and increased the maximum lending age – the age at the end of mortgage term, meaning more borrowers will be eligible to take out a policy. Following the high street lender, Nationwide, UK’s building society, has also launched a new range of retirement mortgage products to support older borrowers with their retirement planning, including more options for releasing equity in their property. This is a positive move for the market with borrowers having more options to choose from and lenders having more options to present to their clients.
Chief executive at Commercial Trust, Andrew Turner said: ‘Our look at the age demographics for 2018 buy to let mortgage activity, suggests that increasing number of older people are recognising the potential of buy to let investments. I fully expect that the returns fair better than many forms of investment’