Property Targeted As New Pension Rules Free Up Investments

NEW figures have revealed that the continuing low interest rates for savers are fuelling a buy-to-let boom.

The statistics echo the experience of Linley & Simpson, which has witnessed an upturn in the number of families making their first foray into the buy-to-let market having grown increasingly impatient with rock-bottom returns on their savings and investments.

They reveal:

  • The value of buy-to-let mortgages on new purchases rose by 34 per cent to £11.6 billion between January and November last year – £3 billion more than the same period in 2013.
  • The number of landlords taking out mortgages on new purchases in the UK also grew by 21 per cent to 93,970 between January and November 2014 – with 8,500 handed out every month.
  • The trend peaked in November – signalling further growth being carried over into 2015 - as lending to landlords soared by 9 per cent compared to the year before.
  • Some 17,700 buy-to-let loans worth £2.4 billion were handed out in November as desperate savers turned to the housing market for a return on their money.

While buy-to-let mortgages are more expensive than normal owner-occupier mortgages, rates have plummeted to such an extent that loans are available with as little as 2.29 per cent interest - making it an affordable option for many Yorkshire savers for the first time.

This trend is expected to accelerate in April when a relaxation of pension rules come into force, freeing up billions of pounds in people's retirement pots to be used as property investments.

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