text: Pensioners are being offered mortgages that will only be paid off when they are 105. Nationwide Building Society is giving anyone up to the age of 70 the chance to take out a 35-year loan – stoking fears of a buy-to-let boom. The offer comes as pension reforms give over-55s access to billions of pounds from today to withdraw from their pension pots and spend as they like. Tens of thousands of savers are being tempted to put their money into property – and this surge of ‘silver landlords’ is likely to push up house prices. Nationwide Building Society is giving anyone up to the age of 70 the chance to take out a 35-year loan, meaning some pensioners are being offered mortgages that will only be paid off when they are 105 (file picture, posed) Traditionally, banks have been reluctant to allow borrowing beyond retirement, but now other lenders are considering raising their age limits too. Savers who want to put their money towards buy-to-let properties are unlikely to be able to afford to purchase a house outright, with the average price standing at £273,000. The option of taking out a mortgage to cover the shortfall has previously been unavailable as banks prefer people to repay before turning 70 or 75. But unlike residential mortgages, funded by income likely to fall away in retirement, a buy-to-let mortgage is funded by rental income, which does not cease when the owner retires. Economists say the increase in silver landlords competing to buy properties is boosting house prices, which are increasing at 8.4 per cent a year. Three in four of Britain’s 2million landlords regard their property as their pension, according to research from financial consultancy BDRC. About one in five homes in Britain are owned by private landlords, and this is expected to rise to one in three by 2032, Government figures suggest. But there are perils too. The buy-to-let boom expected to follow today’s changes could have painful tax consequences for some, experts warn. Withdrawing large sums from a pension pot will trigger a hefty income tax bill – for example, taking out £150,000 will produce a £40,000 demand from HMRC. Buy-to-let homes also attract tax on rental income and capital gains tax if the property is later sold. And for ageing landlords, there is inheritance tax to consider too. Tens of thousands of savers who have had their pension released under today's new reforms are being tempted to put their money into property – and this surge of ‘silver landlords’ is likely to push up house prices . Jane Vass of Age UK said: ‘Although Age UK believes affordability not age should determine whether someone is given a loan, using your pension fund to pay the deposit could have significant tax and financial consequences and if there is a downturn in the rental market you could find your own financial security is jeopardised.’ Nationwide decided soon after the pension reforms were announced in 2014 that it would consider applicants aged up to 70 for a 35-year loan. The firm said it had recognised that buy-to-let was becoming a more popular source of retirement income as reports suggest half a million savers could plough pension pots into buy-to-let properties after the reforms take effect today. Experts have also warned of the difficulty of taking on a landlords’ responsibilities. Financial strategist Penny O’Nions said: ‘A lot of people will buy houses with their pension funds with no idea of the repercussions. ‘There may be excellent advantages but the downsides are that many of them will not appreciate that the management of a property can be harsh. When you are aged 104, do you really want to be managing a property? ‘Difficult tenants feigning problems with the property, periods when the property is empty, council tenants not paying – there is a long list. People should not go into it without good advice.’ If a person with a mortgage that lasts until they are 105 dies before paying off the loan, the usual rules apply: their estate, or whoever inherits the property, would either take on the debt or the house would be sold to pay off the mortgage. However, it is cheaper for young people to obtain life cover to pay off the mortgage if they die early.
target: Pensioners are being offered mortgages that will be paid off at age of 105 .
  Nationwide is giving anyone up to  70 the chance to take out a 35-year loan .
  Tempting for over-55s with pensions released under reforms to buy houses .