Mortgages for older landlords
Research shows that over half (59%) of England’s landlords are aged 55 years or older and one third are retired. Buy-to-let lenders have started to incorporate the market’s age demographic into their lending policies by identifying the pitfalls for later life applicants and then implementing the necessary changes to remedy this.
Potential pitfalls
Lenders impose a maximum number of years an applicant can have a loan for and so for older applicants the loan term may be restricted. This in turn could affect the affordability of the loans as shorter terms might equate to higher monthly payments. It is worth checking how lenders assess affordability, particularly whether state pensions are considered when calculating minimum income criteria.
The solutions
Lenders are changing their criteria to make buy-to-let finance more accessible to older landlords. For example, some lenders no longer stipulate a maximum at application or completion. There are also longer-term fixed rates up to 10 years which can offer affordability relief and security of monthly payments. Variable and lifetime products may also provide a solution. Pensions including private, widow’s and war pensions are becoming more widely accepted by mortgage lenders and existing landlords may also be able to use rental income in their income credentials.
Potential pitfalls
Lenders impose a maximum number of years an applicant can have a loan for and so for older applicants the loan term may be restricted. This in turn could affect the affordability of the loans as shorter terms might equate to higher monthly payments. It is worth checking how lenders assess affordability, particularly whether state pensions are considered when calculating minimum income criteria.
The solutions
Lenders are changing their criteria to make buy-to-let finance more accessible to older landlords. For example, some lenders no longer stipulate a maximum at application or completion. There are also longer-term fixed rates up to 10 years which can offer affordability relief and security of monthly payments. Variable and lifetime products may also provide a solution. Pensions including private, widow’s and war pensions are becoming more widely accepted by mortgage lenders and existing landlords may also be able to use rental income in their income credentials.
Mortgages for young landlords
Obtaining a buy-to-let mortgage is normally pretty straightforward for young adult property investors. Most lenders have a minimum age requirement which is often around 21, although there are lenders who will consider applications from 18 year olds.
Providing the applicant meets other standard lending criteria such as the minimum income requirement (typically around £25,000) then it will be treated like any other application. Many lenders require applicants to be an owner occupier, but if you are considering buying a rental property as your first purchase then there are still options available.
Buy-to-let property is definitely a viable investment option particularly at the moment when savings rates are so low and with the Stamp Duty holiday currently in place on properties valued up to £500,000, there are also savings to be made on the upfront costs of purchasing a rental property.
Property Hawk Mortgages is a specialist in the buy-to-let mortgage market. We have a wealth of knowledge and are dedicated to helping UK landlords find the best financial products and services available to them.
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