Large decline in older borrowers

Data released by UK Finance indicates a significant decline in new buy-to-let (BTL) mortgage borrowing among older landlords, with the number of such loans decreasing by half in the fourth quarter of 2023 compared to the same period in 2022. Here are the key points highlighted in the report:

  1. Decline in BTL Mortgages among Older Landlords: In the fourth quarter of 2023, only 7,980 “later life” BTL loans were granted, which includes loans for house purchases and re-mortgaging. This is a stark contrast to the 16,930 loans advanced to over-55s in the final quarter of 2022.
  2. Impact on the Market: The decline in BTL mortgage borrowing among older landlords, who represent more than a fifth of all BTL loans, has wider implications for the broader market. The reduction in available rental properties could lead to increased pressure on rising rents.
  3. Reasons for Decline: Sarah Coles, head of personal finance at Hargreaves Lansdown, attributes the decline in BTL mortgage borrowing among older landlords to several factors, including higher interest rates, reduced rewards and tax efficiency, leading some landlords to sell their properties.
  4. Market Outlook: While the pressure has eased since the release of these figures, Ms. Coles notes that falling mortgage rates have stalled recently due to persistent inflation. This suggests that swift rate cuts may not provide immediate relief for retirees facing financial challenges.

In summary, the significant decrease in new BTL mortgage borrowing among older landlords reflects broader shifts in the property market, with implications for rental availability and affordability.

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