A specialist buy to let lender is increasing the maximum age of the borrower at the end of the mortgage term from 75 to 85 years old.
Fleet Mortgages says that as a result of the so-called pension freedoms - the ability of pensioners to use all or some of their pension savings for one-off expenditure - there will be a growing number of retirees who wish to invest in buy to let.
The firm - which only began lending mortgages late last year - says that since its launch around 50 per cent of its clients have been aged over 50. In the first three months of 2015 Fleet Mortgages had £145 million worth of buy-to-let business put through its system by intermediaries, with an average loan size across all types of products of £245,000.
“Fleet Mortgages is committed to evolving and enhancing our criteria in order to ensure it is fit for purpose in a changing marketplace – this why we have increased our maximum customer age, at the end of loan, up from 75 to 85 years old’ say the firm’s chief executive Bob Young.
“We recognise, for instance, that people are living longer, that landlords want to hold their properties longer into retirement plus there is a growing appetite amongst people over 50 wanting to invest in property.”
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
%20(002).png)
.png)
.png)
%20(002).jpg)
Join the conversation
Jump to latest comment and add your reply
Good. As I said yesterday, let people do what they want with their own money. If an 85 year old wants to invest in buy to let, then who are we to say no?
It's not quite as simple as that, though, is it? Will an 82 or 83 year old be fit and healthy enough to deal with everything that comes with being a landlord in the same way as a 72 or 73 year old would? In some cases, yes. In other cases, no.
There's a reason why lenders have an age cap. It's not because of ageism, it's because they calculate the risk and believe it's more dangerous to be lending to people into their 80s who, if I can be terribly morbid for a minute, might not be around for too much longer.
People are living longer, so these things are bound to change. But it's not quite as simple as just raising the maximum age up and up. Where do you stop? Do you start lending to people in their early and late nineties? What about people who are 102? These things have to be taken into account.
Agree Jon, there are pros and cons to this. With people living longer, the rules surrounding lending might have to be looked at/updated, but any decision should be thought out carefully and not simply decided on a whim.
I'm also a little wary about this, given the sometimes excessive demands placed on landlords. Not to say that people in their 80s and 90s couldn't cope - there are plenty of people in this age group who are still in fine fettle - but it certainly would represent a greater risk to the lender.
Please login to comment