The number of buy-to-let acquisitions made by landlords nearing retirement age increased by more than half following the re-opening of the housing market – more than any other age bracket.
There was a 52% increase in buy-to-let purchases made by landlords aged between 60 and 64 in the 12 months to the end of June 2021 compared to the same period the previous year, according to Paragon Bank. However, as a proportion of the overall market, this age bracket remained the second smallest at 5% of buy-to-let purchases.
MD Richard Rowntree says the distinct spike could have been prompted by low returns from savings and stock market volatility as older investors looked to boost retirement income. “The pandemic may have also led to an increase in people around this age deciding to either take redundancy or early retirement, which would have given them potential access to a lump sum of money to invest, or they are simply experienced landlords who took advantage of the stamp duty holiday to lower their purchasing costs,” says Rowntree. “Of course, sadly, inheritance can also result in a one-off cash boost.”
Landlords aged between 40 and 44 recorded the second highest percentage increase at 49%, while this group also saw the greatest increase as a proportion of overall purchases, rising from 15.2% of the market in the year to the end of June 2020 to 16% this year. The third highest increase was among 55 to 59-year-olds (45%), while over 65s recorded the smallest increase at 26%.
Rowntree adds: “It was also encouraging to see the majority of purchases in terms of absolute numbers being made by those aged between 35 and 50. This suggests that there’s a strong pipeline of younger landlords growing portfolios.”