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Buy To Let – Retirement Income for Pensioners?

According to a recent article on the thisismoney website, an increasing number of pensioners and older workers are being attracted to the buy to let rental sector with the promise of far better returns on their savings than is available via the usual routes.

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BTL Mortgages More Readily Available for Pensioners This has been made easier by a lot of lenders scrapping the upper age limits for borrowers – some lenders are willing to hand over mortgages to borrowers up to the age of 85, and with interest rates so low right now, income from a rental property is an attractive prospect.

“Over the past few months, we’ve seen an increase in buy-to-let borrowing from older people who see it as part of helping them get through retirement,” says David Bailey from mortgage broker, Middleton Finance.

Changes to Pensions From next April, changes coming into effect allow workers to choose how they take their money at retirement. Pensioners will be able to withdraw a chunk of money from their pension pot and use it as a deposit for a buy to let property instead of buying an annuity (which is the traditional method of securing a regular income in retirement).

Buy To Let is Not an Easy Return Warn Experts However, experts are warning that buy to let is not an armchair investment and prospective investors need to factor in all of the costs associated with operating rental properties, including letting agent fees (if applicable), void periods, and maintenance. There is also legislation to adhere to and although returns on investment and potential capital growth are good, it is not the whole story.


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