Pensioners seeking extra cash turn to buy-to-let

According to Saga there is a 11pc increase in pensioners becoming landlords to boost retirement income. These so called “Grandlords or Silver Foxes” are renting out a property to pay for their retired lifestyle.

Belvoir a leading UK specialist in residential lettings agree that a new generation of older landlords is “almost stumbling” into private buy-to-let housing.

And, for advice, the novice investors are turning to Belvoir – which has an office in Dunstable.

“We were among the first to spot this trend because they have been coming to us for advice,” says Daniel Bourke who owns Belvoir’s Dunstable office.

Recent research shows that the number of older landlords has increased by 33pc since 2009 with a 43pc rise in the number of female pensioners renting out a property.

Pensioners are finding that long gone are the days of final salary pensions and relying on a decent state pension once you hit retirement. Older people who have worked hard all their lives and want to retain a decent standard of living must find the extra funds themselves, but with living costs rising faster than salaries, not to mention falling annuity rates, this is easier said than done.

Daniel Bourke a director at Belvoir Dunstable says: “Belvoir are a national lettings agency, and we have seen a surge in older people becoming landlords in the past four years, with a third more people in their sixties on the books as landlords than four years ago.”

Daniel adds: “We have seen some of these “Grandlords or Silver Foxes” becoming buy-to-let investors by accident, owing to a more difficult financial climate than they had expected. They had expected to sell their properties to finance their retirement, but with rents rising and property prices falling in many areas they have judged it more sensible to keep their property and rent it out.”

It was calculated in 2012 that pensioners needed £12,000 a year to be able to fully participate in retirement. Many people have not saved enough in their pensions to finance their retirement and some pensioners have always planned to use rental income to finance their retirement.

“They are not young career landlords. These are people that, late in life, have found themselves in a scenario they never thought they’d be in. And they are finding that investing in property can be a lot more transparent than trying to understand the intricacies of complicated pension funds.“

This group also inherit lump sums following the passing of older relatives and have nowhere else to put money and get a return as interest rates in banks are so low.

“But, even so, it’s still an area where they need expert advice before they take a leap outside their comfort zone. Can they really afford to do it? Can they find the right tenants? And can they find the right place to move into, themselves, where mortgage or rent payments are within the income they are receiving from their own tenants?

The figures need to balance – and that’s where letting agents can be really useful. We don’t charge for our advice and if people want to dip their toe into the private rented sector we can handle all that for them because it’s what we do.”