LETTINGS NEWS: Buy-to-let more popular, especially for older landlords seeking pension top-ups
Buy to let mortgages are booming, with the biggest increase in demand coming not from professional landlords but from 50-somethings approaching or just entering retirement.
The Council of Mortgage Lenders says the value of buy to let mortgage loans since January is approaching an eye-watering £26 billion, 25 per cent up on last year’s figure.
Several lenders have cut typical buy to let deposits from 35 to 25 per cent because they believe rising rental demand makes the investment safer; forecasters say the proportion of UK households renting, not owning, will rise from a fifth now to a quarter by 2019.
The CML says the biggest rise in demand is from older borrowers. They sell the old family home, move to a semi-rural location like the south west, and use some released equity to purchase a buy to let to generate rent that will top-up their pensions.