As those drawing their pension seek out ways to increase returns on their savings, the housing available is reducing and effectively pushing first time buyers away from the property market, industry experts have said.
Estate agents have revealed a surge in the buy-to-let market that has been driven by pensioners looking to maximise the returns on their savings by buying property to rent out. Miles Shipside from property specialists Rightmove mentions a “high level of interest from “granlords” – new landlords who are typically first-time, retirement-age, buy-to-let investors”.
With the Bank of England rate still at an all-time low of 0.5%, people can get an improved return investing in property and receiving a rental income, than putting in a savings accounts where rates are also at all time lows.
In April, new reforms are to be implemented, making it simpler for those aged over 55 to access their pension, which is expected trigger a boom within the buy-to-let sector. It is feared that this will drive up the house prices at the bottom end, meaning that properties generally appealing to first time buyers become unaffordable, making this demographic unable to get onto the property ladder without an even larger deposit.
With the increased regulation applied by the Financial Conduct Authority (FCA), a more detailed analysis of affordability must be carried out by a qualified mortgage advisor. Having finished your CeMAP training and passing the final exam, you will be in a position to meet with customers and complete an affordability assessment. You can then best advise them on how much they could borrow and the repayment costs and options.