The Rise Of The ‘Grandlords’ buy to let mortgages for applicants over the retirement age.
Firstly can I start by saying I’m not fond of the term ‘Grandlord’ which was branded in a bold headline across The Daily Telegraph’ recently but the content of the Buy to let article reflected exactly the trend I’m seeing in my mortgage business as the average age of customers continues to rise. Why? Well generally speaking Buy to let property remains a resilient investment even against a harsh economic downturn.
A rise in inflation is bubbling under the surface and the cost of living for most appears to be on the rise. Savings, in many cases, have been eaten away through gifts to children to help them through their struggles, whereas in generation past these were hoarded for inheritance legacies which meant the donor felt more affluent whilst they were alive even though in theory this money was earmarked for others.
In short, regular income is has therefore never been more important to supplement pension provision into the twilight years. Buy-to-let mortgages can be a critical component in generating sustainable wealth. I can understand that to take on such a commitment can be daunting, particularly if you have retired, but there is good reason to consider doing so. Let me explain more.
If you have £100,000 you might be able to purchase a buy-to-let in cash in some areas of the country. However, you could in effectively purchase 4 buy-to-lets with 25% deposit. This approach would inevitably spread the risk of rental voids and capital depreciation by avoiding the ‘all your eggs in one basket’ syndrome. Also one of the main tax advantages in this country is the ability to offset the Buy to let mortgage interest against the rental investment income. That’s right depending on your portfolio and tax bracket you could save 50% in tax – try accumulating that percentage from a high street deposit account!
I guess the obvious question is ‘Why would a mortgage lender be willing to lend to me now I have retired?’ Well not all would. However, I have access to several reputable funding lines from FCA accredited specialist lenders, including subsidiaries of major UK building societies that will look mainly at the rental income coverage rather than salaried income. So if you have an eye for a property that could return a rent of over 125% of the mortgage payment then I should be able to help. Recently I have arranged mortgage up to the age of 90 without major difficulties.
For more information on how we can help you get a Buy to let Mortgage into retirement, please contact us on 0207 993 2044 or alternatively complete the simple enquiry form on the top right hand side of this page.
Payam Azadi is a partner at Niche Advice Ltd who are Independent Financial and Mortgage Advisers in London.