New buy-to-let (BTL) mortgage borrowing has “fallen off a cliff” among older landlords. Landlords are ditching buy-to-let mortgages in the UK amid higher interest rates and the ongoing crippling Cost of Living crisis, a finance expert has said.

Figures released by trade association UK Finance on Monday showed 7,980 “later life” BTL loans, including those for house purchase and re-mortgaging, were handed out in the fourth quarter of 2023. This was less than half the 16,930 loans advanced for this purpose to over-55s in the final quarter of 2022.

Later life BTL loans in the fourth quarter of 2023 represented around 22 [er cent of all BTL loans. Sarah Coles, head of personal finance at Hargreaves Lansdown, said of the findings: “New buy-to-let mortgages have fallen off a cliff among older landlords, with the number of these loans halving in a year.

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“Given that older people make up more than a fifth of all buy-to-let loans, this has a wider effect on the broader market.” Ms Coles went on and said: “As more older people decide that being a private landlord isn’t as rewarding or as tax-efficient as they had hoped, it means they’re selling up, which puts more pressure on rising rents again.”

Ms Coles also went on to add: “The more positive news is that the pressure has been easing since these figures were released and lower mortgage rates will have taken less of a toll in recent months.” The expert continued: “However, falling mortgage rates have stalled more recently, as the market digests the fact that inflation is more stubborn than they expected.”

Signing off in her analysis of the findings, which were released today (Monday February 19), she said: “It means we can’t rely on swift rate cuts to get us out of trouble financially in retirement.”