Increase in number of buy-to-let deals after pension changes

Increase in number of buy-to-let deals after pension changes

April’s pension reforms have seen an uplift in the number of mortgage deals available for first-time landlords.

Summary:

  • The mortgage industry has seen a surge in the number of deals available for first-time landlords following changes to the pensions system in April
  • There’s been a 13% increase in these mortgages in the last two months alone, as many over 55s consider alternatives, such as buy-to-let, for their retirement
  • UK student property has seen over £4 billion worth of investment in the first six months of 2015 – can this non-cyclical asset provide the stability and high returns pensioners are looking for?

The UK buy-to-let market is currently booming, and recent pension changes have been one of the key drivers to recent success.

Following April’s reforms, there’s been a proliferation in the number of buy-to-let mortgage deals available for first-time landlords. New data from Moneyfacts has found that there’s been a 13% increase in the last few months, with the 664 deals currently available representing a 40% uplift in the amount available for first-time investors two years ago.

Charlotte Nelson from Moneyfacts said that “with 60,000 pensioners utilising the new pension freedoms, it’s highly likely that some of this money has been accessed with buy-to-let in mind”. On the rise in mortgage rates, she added that “buy-to-let providers are seeking to capitalise on this new pool of cash and are now offering more deals than ever to first-time landlords”.

Research conducted just two weeks after the freedoms found that 53% of savers were considering making a buy-to-let investment, or had already done so, as an alternative source of income for their retirement. It’s important that independent financial advice sought before any investment decision is made.

Findings published last week from Savills shows that £4.2 billion was invested in the UK student property market in the first six months of 2015, with the sector, resistant from external economic factors, delivering strong monthly returns for investors. With most purpose-built student accommodation available as a fully managed investment, it may be worth considering for those savers looking for a hassle-free investment for their retirement.

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