It is no surprise therefore that product innovation continues in the market with a particular area of focus being older landlords.
We estimate there could be nearly 900,000 landlords over 55. For these property owners, there are innovative new mortgage options available to increase ways to boost income from investment properties.
The health of the sector was also evident at Mortgage Solutions’ Buy-to-Let Market Forum, which took place across the country in April.
We took part in the events, with head of sales Les Pick presenting to brokers on new opportunities for older landlords.
What struck us during conversations was the thirst for knowledge around later life lending and the desire for more support and information on the products available.
Buy-to-let mortgage products aimed at older landlords are particularly timely now, for two reasons.
First, there is a slowdown in the mainstream buy-to-let market.
For older landlords looking to extract some of the value of their property portfolio, the usual remortgage options may carry additional hurdles, such as meeting minimum income requirements or affordability assessments. Another option might be to sell one or more properties – but this removes a long-term income stream, as well as any future capital appreciation. New products that allow landlords to release a lump sum to use as they wish, while still retaining ownership of their portfolio, could be used by specialist brokers to plug this gap.
Second, there is huge demand for help with funding later life care needs.
This came up time and time again at Mortgage Solutions’ events. Changes to the way in which long-term care is funded means that increasing numbers of people will need to pay for their care themselves rather than rely on the state, and some buy-to-let mortgages can help to facilitate this.
However, many of the brokers we spoke to were unaware that these products could be used to meet this need.
If an older landlord wants to retain their portfolio to benefit from future house price growth, for example, but release some of the wealth in that portfolio to help with care costs, brokers may want to explore the suitability of an over 55 buy-to-let mortgage.
As new product innovation opens up new opportunities, it is vital that providers work closely with brokers to help boost awareness and understanding of new options to realise those opportunities – something we are committed to doing.