As the baby boomer generation reaches retirement age and starts to withdraw from their nest eggs, experts warn that those in the rental market will be the ones to pay the price. Nearly half a million landlords are expected to sell their properties over the next five years which could lead to higher rental prices as the number of properties available drops.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
According to estate agent Hamptons, about 140,000 landlords left the market last year due to reaching retirement age and 100,000 per year are expected to leave over the next five years. Of course, landlords have been subjected to worsening conditions for years now, with high property prices, rising interest rates, and mountains of red tape so this means that there won’t be many new landlords to step in to replace those involved in the exodus.
With the introduction of the buy-to-let mortgage back in 1996, people jumped at the chance to become a landlord, hoping that their investment would pay out when it came time to retire. In fact, over half of the mortgaged rental properties in existence were purchased within 11 years of these kinds of loans entering the mortgage market.
As the average age of buy-to-let landlords is 60 years old, retirement is just around the corner. While some are opting to keep their properties and manage them throughout retirement, the overwhelming majority just don’t want the hassle involved with being a landlord. Nearly three quarters of the sales of buy-to-let properties last year can be attributed to landlords retiring and letting their properties go.
With this trend expected to continue and experts predicting that there won’t be another wave of landlords to take their place, these properties will likely be sold and purchased as homes, rather than as part of property portfolios since the buy-to-let market has proved out of reach for many people. This should come as no surprise as there are often financial obstacles for people to buy their own home, let alone have the purchasing power for additional properties to use as income generators.
It’s important to note that if you are interested in property as part of an investment portfolio, now is the time to take advantage of the wealth of options available.
If you’re curious about how this landlord exodus could be beneficial for you, contact the experts at Dental & Medical Financial Services today.