The percentage of retired landlords entering the buy-to-let market doubled last year, showcasing an influx of silver savers that could dominate the lettings world, according to new figures released by a leading mortgage broker.
Following the relaxation of rules surrounding our pensions pots, this new strand in the market has emerged, creating a real opportunity for managing agents – who should ensure their agency is set up to reduce pensioner pain points and thus woo an entirely new clientele.
Data from mortgage broker Commercial Trust shows that the proportion of applications from individuals aged 55 to 59 swelled to 18.5 per cent in the third quarter of 2015, up 11.5 per cent from the first three months of the year. Meanwhile, those aged 55 to 70 now make up 31 per cent of applications, with the broker predicting this is just the first wave of what could be a surge.
Different client base, different demands
And while, just like existing landlords, this new sector is looking to make a decent return on their investment, they also come with their own set of needs, something that letting agents hoping to win their instructions need to factor in.
For instance, many people spend their working lives fantasising about jacking their jobs in and going travelling – but for these landlords those dreams could be a reality.
In additional to travel plans, many retired couples now have extensive family commitments, as they step in to assist their children with childcare. Both scenarios render our retirees uncontactable at times – which means that agents dealing with them should seize the opportunity to push for a fully managed letting service, rather than the let only option.
It’s who you know that matters
Retired landlords may not have the contractor contacts that a letting agent has in their portfolio, which means even the smallest issue can become a bigger problem. Having a fully managed service allows a newly retired landlord an opportunity to relax without having to worry about his or her property. It also means that they won’t be pestered in the middle of the night with phonecalls – because any tenant concerns can be filtered through their letting agent.
For these reasons, despite having time on their hands that a working landlord may not, retired landlords are likely to be more comfortable with a premium, fully managed letting service, so it’s definitely worth emphasising the benefits.
Show your value
Systems like Fixflo (reachable from our Contact Us page) promote tenant confidence in reporting repairs, and Fixflo saves time, money, and hassle throughout the repairs process, proving to landlords your commitment toward keeping them worry free and protecting their property, as well as saving them money–which is a message that will perhaps resonate even more loudly with these retirees.
This new wave of landlords comes after pension freedoms were introduced in April, which allowed workers over the age of 55 significantly freer access to their savings and pension on retirement. Rather than being forced to purchase an annuity or go into income drawdown, retirees are now allowed to spend and invest at they choose, subject to the relevant tax rate.
Retired landlords still face buy-to-let clampdowns
However, all landlords, including those using their retirement savings, still need to prepare for planned clampdowns on the buy-to-let sector, most notably the introduction of an extra 3 per cent stamp duty charge in April and the phasing out of mortgage interest relief from 2017.
Are you aged 55 to 70 and looking to get onto the buy-to-let market? If so, what do you looking for in a lettings agent and how has the 3% stamp duty charge effected you? View our lettings page to see what Love Your Postcode can do for you.