New buy-to-let borrowing falls ‘off a cliff’ among older landlords
The number of new buy-to-let loans among over-55s more than halved between the fourth quarter of 2022 and the same quarter last year.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.New buy-to-let (BTL) mortgage borrowing has “fallen off a cliff” among older landlords amid higher interest rates, a finance expert has said.
Figures released by trade association UK Finance on Monday showed 7,980 “later life” BTL loans, including those for house purchase and re-mortgaging, were handed out in the fourth quarter of 2023.
This was less than half the 16,930 loans advanced for this purpose to over-55s in the final quarter of 2022.
Later life BTL loans in the fourth quarter of 2023 represented around 22% of all BTL loans.
Given that older people make up more than a fifth of all buy-to-let loans, this has a wider effect on the broader market
Sarah Coles, head of personal finance at Hargreaves Lansdown, 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 make up 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.”
Ms Coles added: “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.”