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Tuesday, April 07, 2015

Lender addresses 'ageism' in lending

The latest pension reforms taking effect from Monday 6th April allow people to extract a lump sum from their pension pot.  Reports in the media are that this will encourage a whole load of newly retired pensioners to invest their 'lump sum' into purchasing a buy-to-let as an income producing asset and an alternative to an annuity. 

Claims of a rush into buy-to-let  'overblown'
I personally think that claims of rush of newly retired pensioners buy-to-let are much overblown.  A small number no doubt will consider it.  The reality is that if you are retired, do you really want the hassle of a whole load of extra maintenance responsibilities and tenants to look after.  Probably not.  However, for the brave there is good news in the shape of a new buy-to-let mortgage from The Mortgage Works that will allow lenders up to the age of 70 a 35 year mortgage meaning that in theory you could be over a 100 years old before the loan is repaid.  Previously most mortgage companies would not lend where repayment of the capital sum extended beyond a landlords pensionable age say 65. 

The Mortgage Works addresses 'ageism' in lending
This more flexible approach from The Mortgage Works who are part of the Nationwide Building Society is to be welcomed for older landlords who often have the time and life skills to make very good and attentive landlords.  Whether they have the enthusiasm and drive to take on the extra responsibility when most people are winding down is yet to be seen.

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